What is the meaning of Niche market? Concept, Definition of Niche market

Concepts and meanings of niche market

Meaning of niche market

A niche market is a marketing term used to refer to a portion of a market segment in which individuals possess homogeneous needs and characteristics, and the latter are not entirely covered by the general offer of the market.

Characteristics of the niche market

In general, a niche market has the following characteristics:
• It is the fraction of a market segment: i.e., each niche market presents some peculiarities that distinguish them from the segment as a whole.
• It is a small group: make it up people, companies or organizations at a reduced amount (compared to the market segment to which it belongs).
• You have needs or specific and similar wishes: usually, they consist of very specific wishes or needs, and which also have their degree of complexity; Therefore, this group is willing to pay an "extra" to purchase the product or service that meets their expectations.
• There is the will to meet their needs or desires: i.e., presented a "good predisposition" for purchasing a product or service that meets their expectations, and in the case of companies or organizations, have the "ability to make buying decisions"
• There is economic capacity: each component of the "niche" has sufficient economic capacity that allows you to incur expenditure necessary to obtain the satisfactor of your need or desire. They are even willing to pay an additional amount to achieve a better satisfaction.
• Requires specialized operations: there are needs or desires with specific and even complex characteristics, the market niche requires specialized providers able to meet your expectations.
• There are very few or no carrier: in those market niches where the particularities and the complexity of their needs or desires require a high specialization, is normal that there is no more of one or two companies, even can give that there is none.
• Has sufficient size to generate profits: according to Prof. Phillip Kotler, a great market niche is one that is large enough to be profitable.
The market niches formed by a) needs to meet b) unmet needs to wake up and/or c) communication

Definition of niche market

According to Philip Kotler, a niche market is a group with a more narrow (that market segment) definition. Usually it's a small market whose needs are not being well served.
Complementing this definition, the niche market (unlike the market segments that are larger and easily identifiable groups), is one group reduced (from individuals, companies or organizations), with needs and/or specific wishes, willingness to meet them and economic capacity to make the purchase or acquisition.

Characteristics of the market niche:

In general, a niche market has the following characteristics:
• It is the fraction of a market segment: i.e., each niche market presents some peculiarities that distinguish it from other niches or the segment as a whole. For example: people who use air transport to move to a distant place, represent a segment of the market. For its part, the people who choose to "executive class", in addition to travel by plane represent a "niche".
• It is a small group: make it up people, companies or organizations at a reduced amount (compared to the market segment to which it belongs). For example, the number of executives or people who choose the "executive class" on an airplane flight, is much more limited than the number of people travelling in "economy class".
• You have needs or specific and similar wishes: usually, they consist of very specific wishes or needs, and which also have their degree of complexity [3]; Therefore, this group is willing to pay an "extra" to purchase the product or service that meets their expectations. For example, people who choose the "executive class" on airplane flights, have very special requirements, such as: more space to stretch your legs, seats more comfortable or padded, a menu of food and beverage exclusive, personal most qualified to assist them, music, video, special pillows, etc...
• There is the will to meet their needs or desires: i.e., presented a "good predisposition" for purchasing a product or service that meets their expectations, and in the case of companies or organizations, have the "ability to make buying decisions". For example, people travelling in "executive class" request your ticket for that category of travel, even without that airline staff suggest it is.
• There is economic capacity: each component of the "niche" has sufficient economic capacity that allows you to incur expenditure necessary to obtain the satisfactor of your need or desire. They are even willing to pay an amount of additional (to the average) achieve a better satisfaction. For example, people who choose the "executive class" in any airline, have sufficient economic fluidity as to pay an amount extra for giving that luxury.
• Requires specialized operations: there are needs or desires with specific and even complex characteristics, the market niche requires specialized providers able to meet your expectations. For example, "executive class" customers expect airlines to provide them with an exclusive window where you do not have to do row, a more comfortable space in the waiting room, qualified personnel to care for them, special memberships, Executive client cards, etc...
• There are very few or no carrier: in those market niches where the particularities and the complexity of their needs or desires require a high specialization, is normal that are no more one or two suppliers, it may even be that there is none.
• Has sufficient size to generate profits: according to Prof. Philip Kotler, a great market niche is one that is large enough to be profitable.

Additional notes:

A very important detail to take into account by marketers, is the trend that companies to locate and develop "niche markets"; reason why, now there is the term "nichologo"; which has been defined in a web page of website, as "the professional specialist in the search and identification of niches in a certain context of market, internal and external". Another related fact is that Prof. Philip Kotler identifies this same specialist as the "marketer specializing in niches".

Both cases, allow us to visualize the importance that come taking the niches of market and the degree of specialization is coming need.

Concept of niche market

A niche market is a market segment consisting of a small number of consumers with homogeneous and easily identifiable needs and characteristics. Due to its small dimension, niche markets are generally despised by large companies, constituting, therefore, excellent opportunities for small businesses, that there can escape from the domain of big companies and achieve a leadership position, through a very specific and offer adapted to the characteristics and needs of the consumers who constitute the niche.

What is niche market on the Internet

A niche market on the Internet is a term of marketing on the internet which is used to refer to a group of people who look for solutions to common problems online and can't find relevant results.
The term niche market on the internet differs from the definition of niche market in the traditional marketing, since in the latter, a niche market is defined on the basis of similarities regarding geographic, demographic, psychological, social market and behaviour of a group. I.e., a niche market could be defined as a group of people living in the State of Texas, male, and they have between 35 and 50 years of age.
When we talk about the niche market on the internet, these characteristics have less importance and are not used as determinants for its definition. In this branch of marketing, enough that a group of people have a common need and who are looking for a solution to it to be defined as a niche market.

Definition of niche market

Market niches

Not only market can be divided into segments, but also in niches and ultimately individuals. As a selling company subdivides a market to identify most singular features, the segments tend to become a set of niches.

An attractive niche characteristics are as follows:

-Customers who constitute the niche have a set of needs, to some extent, unique and complex.
-They are willing to pay a premium for that company that best meets your needs.
-If you intend to obtain success, mercadeologo specialized in niches will have to specialize its operations; and it is not easy to attack the leader of the niche for other competitors. (Kotler, P.).

Marketing specialists will no longer concentrate in large segments to find and go to specific niches. In the niches there is wealth.

What to ask is when you go to build a niche market

1 People want what you're trying to sell you or you have to convince her to sell your product or service?

If your company has to create the need, your effort will be very expensive. The best thing is to be sure to is necessary before entering into business.

2 To niche marketing the key is to specialize.
In what to specialize your business?
Are you going to specialize geographically?
By customer size?
In a single product, a type of product or a product line?
In quality and price?
In service?
In a single channel or multiple channels?

3 Its market potential is poorly attended or unattended? In other words, you does competition in that market for your products or services?
Do as many other companies do exactly what you do?
You have the market fit for another company?
What is your level of risk?
What so easy is entering this market?
What will be the likely reaction of the main competitors?

4 Is your potential market big enough to consider it a segment of the market?
What is the size of your market goal and the purchasing power of your customers?
If it is very small so profitable it is to take care of it?

5 Is your company able to cater the geographical area of its niche?
How much will cost take care of in terms of all the resources that will demand your coverage?
Has your company to develop distribution channels or will be easy to penetrate existing ones?
Can your company establish a direct channel with your customers via phone, fax or computer?

6 Is your niche is easy to reach through its marketing and communications efforts?
Do you have to buy the niche through a very high investment of resources?
Is this cost-effective purchase?
What are their costs, competition and customer?
What so high is the risk?
Is it best to rethink your business?

7 What is what differentiates it, for being special and unique from its competitors?
Will your company present an enhanced version of an existing product or is going to present to the market a completely different option which complement or replace the options available to current users? A clear differentiation and positioning are critical to your business. Not worth the offer the same (price, service, technology) offered by others. But it has a clear strategy of differentiation and positioning will be part of the heap.

8 Is your company able to refocus or redesign its niche when the circumstances warrant it?
What is the probability that your niche is exhausted or be attacked?

Niche strategy must be flexible in such way that it can adapt to the changes that occur in the scenario of the market. The trend in the strategy of companies is having multiple niches to increase chances of survival.

Advantages of niche market in times of crisis

The fierce competition enhances the more generalist is our project, i.e., services and offers standard and broad target market is saturated and that single segment might compete to force invest large outlays on marketing in general, and advertising in particular.

Therefore, the essential idea for entrepreneurs in Internet not having large sums of capital is to create products or totally innovative services, and better yet, enter microsegmentos in the market where there are no competitors, or have not yet reached the stage of maturity.

It's isolating elements of a market that is already dominated in its general scope but has still unconquered total development on a small scale, i.e. the application of market niches, which are nothing more than micromercados without conquering the dominant competitor who cannot reach or cover in optimal conditions for reasons of profitability or impossibility to provide variety of products or services.

Specialization

We think, to illustrate it, in real life: a local market for the furniture sector, which tends to be saturated and well covered with establishments of high, medium and low range, and even specialized in kitchen furniture. These shops have a full range of furniture and accessories. However its offer is extensive but not intensive, i.e. they have bedrooms (up to 20 models as average), shelves, tables, etc, but always with a limited supply of products.

Let's take a hour ideas very segmented as establishments specialized in chairs that have been all the rage in the capitals. These, due to its intensive specialisation, are able to offer hundreds of models with localization and services after sales that would be impossible for a standard furniture store. They have conquered a niche market that was not covered and could not cover the large furnished.

Market niches in the network

How to move the market niches to Internet?, because the task is reduced to delimit not yet saturated market spaces, i.e. Services, sales or products not yet dominated and not massively found in pages and portals in the network.

Specifically, at this stage would be a suicide by launching a macroportal (although it is still done with the subsequent successive failure), but nobody has thought, for example, to create a portal specializing in executives who don't have time to browse and want their private needs.

As noted, the idea is based on lower rungs on the market, making it easy to offer greater content and service with respect to competitors who want to cover all segments, making it impossible to specialisation and intensive in each service.

You must never forget the goal of profit, therefore to isolate the portion of the market, it must be profitable, so it must be composed interesting target audience from the economic point of view: the market should be reduced, but not income.

As a result, this can be a good solution to combat the current crisis, and on the other hand, ensure that Internet is well stocked products and services for all needs.