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Finding your niche.

Articles May 16, 2016

Very few entrepreneurs will ever be privileged to invent a completely new product or service. It’s either too difficult to come up with an original business idea  or it is prohibitively capital and research intensive to be the first one on uncharted terrain (commercial space travel, anyone). To add insult  to injury, innovators such as Motorola (creator  of first handheld mobile phone)  usually find  themselves overtaken by later entrants to the market and let’s face it, most enterprises would choose market leadership status over first to market status, hands down.

So how does one get a good slice of market share without constantly worrying about competition? The short answer is that you can’t.   There will always be some amount of competition. However  finding a niche market makes life simpler.  Though it appears that by electing  to serve  a niche you have reduced your market base and profit levels, the reality is  that capturing a large market when you are a small player  is highly elusive.  A niche market focused strategy gives you better odds of dominating a larger share of a smaller market  because you are catering specially to this market’s needs.

How does one find  or create a niche market? There are several good articles on the internet  that offer good insight on identifying a niche.  We however  believe  the following  are  three key attributes of a profitable niche market:-

  1. You know and understand these people. They are your tribe:  The concerns and interests of the people who comprise your niche should not be foreign to you.  If  for example you are selling  physical training services to over  modestly active persons over 50, you should be attuned to the group’s goals and obstacles to goal attainment. You  would know that though it is carnival  season  a programme highlighting sexy abs and rapid fire weight loss would not electrify your clients.
  2. They have the means to buy your product/service at a price that returns a profit: May seem obvious but it is worth stating. Your niche must be able to pay for  your  product. No sense in marketing high end  coffees and teas to a niche that is  primarily value driven in terms of their food choices and purchases. They may purchase once or twice  but never on the  consistent basis  necessary to  make your business sustainable.
  3. The niche is  large enough to sustain a business long term: It may  be tempting to define a niche that is so particular that you are one of a handful of businesses catering to that market.  However you need to ensure that either you are selling a product that this highly specialized niche needs on a  frequent basis ( so you make money on repeat sales ) or that the niche is still  large enough  that even sales from a small number of the niche  are enough to support the business. After all there is a reason why no-one has heard of a successful hardware store selling only novelty tools for  women.

Recently,  a good friend of mine, a fitness trainer and incidentally a marketing professional, told me about her plans to start a  fitness programme centred on walking. In the  hyper -intense  world of Crossfit and Alcatraz classes, I was not convinced that anybody would be interested in  something so hum drum as walking. Turns out I was wrong. Two days after she started advertising her programme, several persons called  expressing an interest in the classes.  Each of the callers fit to a tee the profile of  her  target market.  I was blown away.  Clearly she knew her niche.

So there you have it. Happy niche hunting!

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