What is a market niche and how to define it?

What is a market niche and how to define it? post thumbnail image

The so-called niche is the portion of a broader market in which specialized products or services are sold. Defining the niche and sub-niche is advantageous because it means meeting specific demands that generic ventures cannot meet, and thus niche companies build loyalty and revenue with an audience that was often overlooked.

Let’s take an example: we have the food market niche, right? It contains the healthy food market, which serves consumers who prefer or can only eat gluten-free and lactose-free foods. That’s a sub-niche.

It doesn’t matter if your business is digital or not, defining the niche and sub-niche for it is almost a must. In Brazil, for example, according to our Digital Business Panorama 2020, 18% of digital entrepreneurs work in a niche, Business, followed by Digital Marketing and Education.

Interested in having your niche market well defined too? So read the text!

What is it and why is it important to have a niche and market sub-niche

Have you ever stopped to think that every nest is made of very similar offspring since they are from the same parent organism? The etymology of “niche” comes from a nest and its definition is similar — it is a group of people with similar profiles and interests and who, for this reason, make up a great business opportunity.

After all, if you focus your attention and effort on satisfying the desires of a smaller and more homogeneous audience, the chance of success increases. This is even more accentuated when you manage to define a sub-niche within your niche. In other words, make it even more specified.

But there are more advantages involved in having a sub-niche, note:

Deal with less competition

Broad markets are home to entrepreneurs from various categories — from micro to large. It’s not easy to compete with heavyweight business owners who have resources and loyal customers, so if you’re just starting out, having your sub-niche early on can help you get results faster.

Charging advantageously for products or services

There are solid explanations why the niche entrepreneur can charge more for his product or service: customers are specific and do not have as many options to choose from (which goes back to the argument of less competition). Thus, the market sub-niche that is little explored makes room for you to place the price more freely, without considering existing price ranges.

Have a more assertive marketing plan

One of the indicators of the effectiveness of marketing campaigns is the accuracy with which they reach the ideal customers. If your customers aren’t similar as in a nest, showing that your solution matters can be a lot more difficult. Different interests = different communication.

Get more qualified customers and, therefore, at a lower cost

If you bring together a group of people with the same needs and your work is based on that same desire, you won’t have to work so hard and try to persuade them at all costs to get sales. With that, your marketing plan brings more return and, ultimately, more revenue.

Show expertise

Specialized knowledge, by definition, is linked to specificity. It’s almost impossible to become an expert for a diverse audience. A market with people with different needs is more compatible with generalist professionals, who do not have as much authority as masters.

Find more aligned partners

There are many marketing strategies, and business per se, that involve the participation of a partner, such as guest posting and co-branding. If you are part of a market with different professionals, you are more likely to partner with someone who is not so aligned and, as a result, with an audience less interested in your solution.

Tips for having a well-defined market niche

Choose a targeting factor

Values, interests, geographic location, price, income (purchasing power), quality (degree of demand) are some of the most common. Example: clothing market with a niche in geek fashion. What’s more, skipping this step can hurt your business. What’s the point of creating a product with a fantastic finish if your audience, naturally, doesn’t care about it because they are more attached to prices, for example?

Get help from Google to define your niche

If you’re still struggling with market segmentation, type your product or service into Google and “from” or “to” and see search suggestions. For example: “baby clothes” suggests “baby clothes”, so the baby clothes niche is highly searched in the search engine.

Produce content about your product/service

It’s okay if you don’t know your niche yet, but don’t wait for this discovery to fall from the sky. By producing informative content about your solution, you gain the possibility to get feedback, comments and a series of insights that can give a bearing on the profile and interests of your persona and your customers.

Create a mind map about your product/service

Content producers are already encouraged to work with mind maps, but this tip is worth reinforcing. Your brain may be used to the issues surrounding your product. But once you put the ideas down on paper, there’s a greater effort to extract more related elements — and they could be the hallmarks of your niche.

Ask yourself about unresolved issues

Usually, relevant businesses are the ones that solve problems. Think of bottlenecks, difficulties people face. Match this to your product or the area you dominate. It may be that there is already a product or service that is the answer and if it is not explored, great, it is yours. If there is no such answer, it’s time to create one and call it your own.

Thus, the market niche is a simple concept (that of a group of people with similar characteristics), but which offers unique benefits to any entrepreneur. Furthermore, there are several ways that help define your niche, which makes this task accessible and practical to perform.

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