Niche marketing is when company’s or businesses target a specific part of the market. They are only focusing on a minority as they are not globalising their products which may not suit the rest of the market. This suggests that primary research is needed so that that it fits what the clients want in a product.
Niche marketing can provide certain exclusivity to certain target market as the products can be s0ld as a high price. A quote from THE DESIGN TRUST, [”Instead of the risk of spreading yourself too thin, and say that ‘everybody’ is your potential client niche marketing will help you to focus on a specific group of people, and what their specific needs and wants are”], THE DESIGN TRUST(2014). This makes the company’s or businesses gain a lot of profit as there is a limited amount of stock to sell.
The Niche market can provide high price points of products which can be sold to major companies such as Asda or Tesco or online retailers as there may be a gap in the market. This provides business and innovate ideas that could turn pennies into pound in no time flat; if aimed at the right target market.
However, it might be argued that aiming at a certain target market may be risky as they may not accept your product concept. This implies that they won’t buy or invest in your product. Also, by not branding your product to the world, people won’t recognise your company. It won’t bring you lots of sales or profit as major companies do.
There are different examples of Niche marketing such as consultants which they specialise in providing advice in a specific area. Websites that sell certain goods that can only be bought online. Retailers who supply certain products that is hard to find. This implies that Niche market can provide exclusivity, add value to the business, sell products at a high price with few discounts and search for opportunities as there are gaps in the market, the company can go into.
Niche marketing can also lead to brand extensions. A quote from TUTOR2U, [”Brand extension refers to the use of a successful brand name to launch a new or modified product in a same broad market. The Lucozade brand has undergone a very successful brand extension from children’s health drink to an energy drink and sports drink”] (Fig 1), TUTOR2U (2012). This suggests that when entering to a new market, profits can be made as the product is innovative and unique.
Figure 1: Lucozade brand extension
By splitting traditional markets into segments and devising separate marketing strategies for each niche, [”you will be selling products and services that more closely meet customer needs”], LINNEMAN.R.E. And STANTON.J.JL. (1991)
AUTHORSTREAM (2014) Lucozade brand extension. [Online Image] Available from: http://www.authorstream.com/Presentation/aSGuest58899-460493-lucozade-brand-extension/ [Accessed 09/12/14]
LINNEMAN.R.E. and STANTON.J.JL. (1991) Making Niche Marketing Work: HOW TO GROW BIGGER BY ACTING SMALLER. United States of America: McGraw-Hill, Inc.
THE DESIGN TRUST (2014) What is niche marketing? And 8 good reasons why you should bother and not worry about losing out. [Online Article] Available from: http://www.thedesigntrust.co.uk/what-is-niche-marketing/ [Accessed 09/12/14]
TUTOR2U (2012) Brand extension & brand stretching. [Online] Available from: http://www.tutor2u.net/business/marketing/brands_extension_stretching.asp [Accessed 09/12/14]