Definition: Niche Marketing
A niche market is a focused targeted part (subset) of a market sector.
By definition, a company that focuses on a niche market, therefore, focuses on the need for a product or service that is not used by established providers. A niche market can be considered as a narrow group of potential customers.
A pronounced niche market usually arises when a potential supply of a product or service is not covered by a supply or when new demand arises due to changes in society, technology or the general environment.
Niche marketing companies can become profitable, even though they are inherently small compared to the mainstream market, due to the advantages of specialization and the focus on small identifiable market segments; even without the benefit of economies of scale. Niche markets can be ignored or discounted by large companies because of their low potential; This in turn is part of the process that will make the niche market available to smaller companies. The key to exploiting a niche market is to find or develop a market niche that has customers who are accessible, grow fast enough, and who are not already part of an established provider.
The term "niche" was first used by ecologists to describe the location and use of resources in their environment. When used in business, the term implies a situation or activity that is perfectly tailored to a person or a certain type of personality. This concept has been extended by people to products in the market. While a niche in the strict sense may be a working position or an area suitable for a person occupying it, the market niche is perfectly suited for a product of human labor.
Marketing in and for niche markets
Niche marketing is the process of finding and serving profitable market segments and designing tailor-made products or services for them. For large companies, these market segments are often too small to profitably serve because they often lack economies of scale. Niche vendors often depend on the customer loyalty business model to achieve profitable revenue.
Online niche marketing
A commonly used technique for affiliate marketers. By searching for smaller segments of larger markets, a website can be quickly developed and promoted to serve a targeted and generally loyal customer base, giving the affiliate a small but regular source of revenue. This technique is then repeated over several other niche pages until a desired income level is achieved.
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