Learn about niche markets — benefits, examples, and strategies
The marketing landscape is filled with messaging and noise, making it difficult for marketers to stand out from the crowd and ensure their specific stories are heard. One way to manage the competition is actually to reduce it by honing in on target segments and buyer personas, making sure messaging makes it to the right people at the right times.
Among the best ways to do this is to pursue a niche market. This can help differentiate a company and connect brands with the right consumers for their products and services. It can also help businesses establish a brand with their desired audience.
Niche markets are segments of the overall market with unique needs informed by geography, demographics, income, or interests. Targeting niche markets allows businesses to cut through the noise in saturated marketplaces to form strong bonds with consumers.
In this article, you’ll learn:
- What a niche market is
- Benefits of niche markets
- Examples of niche markets
- Strategies for reaching niche markets
- How to find your niche market
- How to build your niche market
What is a niche market?
A niche market is a specialized subset of a market or industry that has its own unique needs, interests, and behavior patterns. The prospects within a single niche market typically have the same desires as one another, making it easier for marketing messages to resonate. Niche markets also tend to be very specific, narrowing down the likelihood that products or services will be a fit for consumers.
For example, the software industry is a market that may appeal to anyone with a computer or technology needs. However, a niche market could be software for artists, and a further niche market could be software for video designers. The more specific a marketer is with how they define their niche market, the more targeted their messaging and their buyer personas will be.
Benefits of niche markets
Targeting a niche market helps marketers tailor their messaging in ways that are most likely to click with their readers. Marketers can get specific with value propositions and advantages without having to necessarily educate the consumer since they’ll already be familiar within the niche. This can make messaging and content marketing more streamlined and impactful when it comes to running campaigns.
The benefits don’t end there. Niche markets also allow marketers to:
- Meet a unique consumer need. By addressing existing demand, marketers are more likely to create connections that lead to sales, retention, and referrals.
- Build brand loyalty with a targeted buyer. Working with a smaller segment enables companies to focus on quality of goods and services, especially customer support, which can encourage consumers to remain loyal.
- Work against less competition. The more marketers drill down into a niche, the less likely there will be other companies that do exactly what they do and how they do it. This helps businesses stand out to buyers with less competitive marketing noise.
- Establish credibility in the field. Marketers can highlight thought leadership rather than consumer education to demonstrate their prowess in a niche and create trust.
Examples of niche markets
Niche markets might be best described as industries within industries within industries. The goal is to drill down as far as possible with marketing content so that messages resonate with exact customer needs or desires. Let’s take a look at some examples and how applying a niche market can help companies succeed.
Five examples of niche markets
The fitness industry is worth more than $32 billion. That includes everything from gyms to fitness clubs and personal care. To find a niche market, consider the different subsets there are within fitness — gyms, home workout equipment, mobile apps, apparel, tech gear, and more.
One prime example of niche fitness marketing is Peloton. Not only does it target cycling (a subset) but it targets cycling at home (a subset of a subset). What’s more, Peloton is considered a luxury brand, so it’s targeting a further subset of buyers who are willing to pay for high-end goods. While this is clearly a niche, Peloton has also created a loyal following with a subscription model on top of it. The result is that Peloton had 2.76 million subscribers and grew 66% year over year.
We’re a nation of foodies, with the average American spending more than $2,000 each year eating at restaurants or ordering take out. Monthly grocery bills in the US average $230–400. Companies are taking advantage of niches to stand out to consumers looking for specific types of products in their grocery shopping, such as those that appeal to certain dietary restrictions.
Gluten-free products are one example, with a market value over $4.3 billion. Brands like Happy Campers stand out even more within the gluten-free niche by appealing to consumers of organic goods.
It’s no surprise that consumers love their pets. The average owner spends more than $1,300 annually on their pet, including everything from toys to food to veterinary services. And with the pet industry worth over $45 billion, there’s plenty of noise that makes finding a niche incredibly impactful.
Popular niches in pet care include food, furniture, walking and boarding, and entertainment. Pet toys alone are projected to reach $3.7 billion by 2027. One company that’s created a niche within a niche for pet toys is Chuckit!, which specializes in dog toys specifically for playing fetch.
Travel can include anything from a day trip, to a road trip, to a trip around the world. The market for tourism and travel in the US is nearly $960 billion. At that size, niche marketing is a must. From airlines to planes, trains, and rental cars, there’s an industry within an industry to be found at every turn.
The brand Hipcamp took its niche marketing to the next level. Focusing on travel within the lodging industry, with a specific focus on camping in style, this brand has successfully narrowed down its target audience and niche.
The gaming industry continues to grow, with a projected revenue of $260 billion by 2025. This market can be segmented any number of ways, starting with platforms. Computer gaming alone is estimated to bring in $37 billion, and within that category games can be divided based on genre, number of players, and demographics, just to name a few.
The Call of Duty franchise has successfully generated more than 400 million lifetime unit sales by focusing on first-person shooter players who are looking for a platformer experience.
Strategies for reaching niche markets
What all of these examples and companies have in common is that they defined their niche and crafted a clear strategy to communicate with their target buyers. Here are some strategies that can be applied to any business to help further segment and target marketing efforts.
Get really good at one thing
Companies that excel in niche markets are not generalists. They work hard at being really good at one type of product or service and promote that regularly. Staying focused helps them further customize or even segment their own offerings based on their unique insights about the space they operate in.
Solve a specific problem
Products and services that meet consumer needs will resonate the most. Instead of trying to cater to the masses, create goods and messaging that address pain points in a customer journey. This can be anything from a struggle to an unmet need or a way to simplify an existing process or product.
Find and define your customers
Knowing who to target can help marketers effectively identify with prospects and provide compelling messaging that promotes conversions. Consider that a niche can be based on any set of criteria including demographics, pricing, values, and geography.
Write a business plan
With a clear definition in place, marketers and executives can create business plans designed to support the sale and progress of products and services. These are critical documents that detail corporate objectives and how to achieve goals through marketing, financial, and strategic planning. Without a clear target segment or niche, business plans can be too vague to yield practical results.
Market to your audience
A business plan can also outline how and where to market to a particular target audience. When done right, a niche market and its buyer personas will define where, how, and why consumers prefer a product or service. It will also define what channels to use to engage with that audience. Consider what the customer journey looks like and the channels a buyer is likely to use. Marketers want to be where their customers are, and using automated marketing software can help them be in more than one place at once.
Adapt as you receive feedback from consumers
Marketing is all about adapting, and customer feedback is among the most valuable data available to properly recalibrate campaigns and outreach efforts. As products and services are updated, marketing messaging should also evolve to inform new features or options. Campaigns should be targeted but agile to produce results for your niche.
How to find your niche market
Defining a niche market is easier than it might seem. Companies can explore the areas they want to perform business in and analyze the type of consumers who may engage with them. Here are a few tactics for identifying your niche market if you don’t have one already.
Explore the landscape
Market research is valuable to any company, regardless of size or industry. It helps to understand the problems that your products or services are aiming to solve and the demand for a solution in the market. Surveys can be a great tool for better understanding what messages and features connect the most with each buyer persona.
Identifying and analyzing the competition can offer a competitive advantage all its own. What, why, and how a company provides solutions to existing problems with their products can identify a niche automatically. Many companies are launched because a founder had a need that no other business could solve. If that’s the case, then there is a niche market with potential to dominate the marketplace.
Niche is important, but too much of a niche can backfire. Make sure that a product or service isn’t so niche that there’s no consumer base to support it. Marketers and businesses need to be honest with themselves about whether an offering has enough of a foundation and following to make it profitable and sustainable for the long run.
Companies that are new to the market can test a niche by sharing prototypes and campaign messaging to support them. Pop-up businesses are a great way to trial a concept, determine demand in the market, and gauge consumer response.
How to build your niche market
A niche market is one that segments an existing industry into a subset characterized by its own needs and interests. Consumers in a niche market typically respond to targeted messaging that is designed to address their specific preferences and make offers that solve precise problems. By further identifying the niche market that products or services focus on, marketers can more accurately target potential customers for a higher return on their marketing campaigns and investment.
With a niche market, marketers can take the next steps to outline their customer journey. And with Adobe Campaign, they can do so with tools that support everything from profile creation to multichannel customer engagement. Paired with Adobe Marketo Engage, marketers can apply their segmentations and buyer personas within their niche to communicate effectively and automatically with their targets.