Niche Marketing

Marketing Management Assignment 2

A niche market also known as a target market is a focused, targetable portion (subset) of

a market sector. By definition, then, a business that focuses on a niche market is addressing a

need for a product or service that is not being addressed by mainstream providers. A niche

market may be thought of as a narrowly defined group of potential customers. A distinct niche

market usually evolves out of a market niche, where potential demand is not met by any supply.

Such ventures are profitable because of disinterest on the part of large businesses and/or lack of

awareness on the part of other small companies. The key to capitalizing on a niche market is to

find or develop a market niche that has customers who are accessible, that is growing fast

enough, and that is not owned by one established vendor already (Wetzler 1).

Niche marketing is the process of finding and serving profitable market segments and

designing custom-made products or services for them. For big companies those market segments

are often too small in order to serve them profitably as they often lack economies of scale. Niche

marketers are often reliant on the loyalty business model to maintain a profitable volume of

sales, this also means that there is a gap in the market (Kotler 362).

Market-nichers avoid large markets and try to be the leader in a small market or niche.

Nichers have three tasks: creating niches, expanding niches, and protecting niches. Multiple

niching is preferable to single niching. In this essay I will identify three "nichers" (firms and/or

brands) and explain why they are "nichers" based upon the criteria in the chapter (Kotler 363).

A niche is a more narrowly defined customer group seeking a distinctive mix of benefits.

Marketers usually identify niches by dividing a segment into subsections. An attractive niche is

characterized as follows: The customers in the niche have a distinct set of needs; they will pay a

premium to the firm that best satisfies their needs; the niche is not likely to attract other

competitors; the nicher gains certain economies through specialization; and the niche has size,

profit, and growth potential ( Wikipedia 1). Whereas segments are fairly large and normally

attract several competitors, niches are fairly small and normally attract only one or two. A

market-nicher is a company whose products serve segments not being pursued by firms with

larger shares of the market.

Here is an example of niche marketing: a brand new print magazine, called Magazine Soho. The publication targets not small business -- a broad category to be sure. No, it targets a segment of small business: Soho's -- small office, home office workers. And with a particular geographic emphasis on southeastern Wisconsin, USA. Magazine Soho is published by Cd Vann.

Cd had this to say in her inaugural edition:

Call me a "serial entrepreneur." Call me a free agent, micro business, or better yet, call me a Soho. But please, do not call me a "small business." I think BIG! I am a property owner, a graphic designer, a web mistress and now, a publisher. I am poised for growth. I am constantly looking for ways to offer excellent customer service. I "work my net" while paying it forward. But to say that I am small is to imply that I do not have purchasing power. Don't let the budget decisions of a few define us all. I have spent thousands of dollars on marketing, advertising and building my business -- especially in office supply stores; they love me! I am a growing business. I am a Soho.I know of other Soho's across the United States; better yet, right here in the state of Wisconsin. These are the businesses that will never make the "million dollar income stream," yet vigorously provide services for large companies through private, local and government contracts. Most importantly, Soho's contribute to our economy via jobs, services, products and inventions. It is because of these vast contributions that I am launching