You think you have a good idea for a product, but you have no idea how to identify your niche and where to find potential customers willing to buy your products. You feel confused and lost because finding a specific market niche with good growth potential seems very difficult. And a vast pool of potential customers willing to buy your products or services. You fear that you will be overwhelmed by the competition, that there will be no profit margin, and that you will waste time and effort on the wrong markets and customers. But it doesn’t have to be that way.
With my help, you will identify your profitable market niche and find a segment of potential customers willing to purchase your products or services. You will learn to generate ideas on how to market this new group of potential customers to quickly evaluate a possible market niche to understand if it is worth investing in. Best of all, you will know how to launch your products or services successfully in a competitive market. In this way, you will have a greater chance of success and reduce the risk of failure; you will be able to circumvent the competition and avoid becoming victims of the big fish of your target market. And all this by simply reading this article. Doesn’t it seem like a great idea to read it all?
What Is A Market Segment?
Let’s start with the definitions: a market niche is a specialized market, a small subset of a mass market, where people have a specialized need and can be served by a technical business. The key to having a booming niche market is to offer a product or service that is unique and relevant to the specific needs of the target market. Or instead, for a small slice of it. The niche market allows you to focus on serving a particular segment of your call. You can create unique products or services tailored to your customers’ needs by focusing on them. By the way, to learn more, you can read my article on how to launch a new product or access my free resources. Another way to define a niche market is this: it is a market with a minimal amount of competition. For example, for a personal trainer, it could be:
- – male customers only
- – only between 40 and 45
- – only if sedentary and willing to get back in shape
- – only if very stressed and with little time
At first glance, it might be a contradiction: why limit your potential market so much? Why not accept other customers? Because being specialized is the key to modern business. The best way to visualize this concept is as follows: it is like a laser beam compared to a projector. A projector is brighter but also more comprehensive and covers less distance. The laser beam, on the other hand, despite having much less power, cuts the metal and can be seen from miles away.
Market Segmentation: How To Find A Niche Market
We have said that a niche market is a slice of the market within a larger market. Indeed it is a market segment. Let’s assume this. Your business market is saturated: you are competing with too many companies with similar products. Your ideas are running in circles, the turnover is not growing, and the prices are falling due to the downward competition. Not sure what to do. The solution is to segment your market. It may seem counterintuitive, but by defining a specific need for your business, you will find more opportunities for success than if you were trying to enter a larger, more competitive market.
How To Segment The Market In 3 Steps
Here’s what we could do together to find the right market segments for you and lead your niche market. First, we analyze both customers and non-customers; this allows us to see what other products they buy and the brands they prefer (don’t have customers? Keep reading) However, know that I have written an in-depth article on how to analyze your target audience. Second, let’s look at the market itself:
- whether it is growing or shrinking
- how is it affected by the economy
- what social trends drive it
- who the competition is and how it positions itself.
Finally, we explore the creative possibilities of the market, both in terms of visuals and content. This is where we can make your brand stand out. Later in the article, I’ll give you more helpful directions for finding your niche. I know; keep reading.
Types Of Niches
There are many types of market niches in the business. Finding a profitable one is your first goal. A niche is any group with the same problem or desire (or both). The key, therefore, is to find an issue or wish that is common to a large group of people and that you have a good chance of being able to solve. Generally, there are these types of niches based on as many market segments:
The First Type Of Niche Is To Specialize In A Particular Industry
In this case, we are talking about an industrial niche. This strategy is beneficial if you have a lot of knowledge of a particular sector, but it can also be risky. If you choose a place with too small a market, you may not get many customers and, therefore, not have enough profits. What are potential niche products? For example, the laptop market could be divided into several potential customer niches:
- business travelers
- media creators
- students and players
Each of these market niches has different needs, which can be affected differently by your perfectly calibrated marketing message. Another example can be to sell garden furniture for the home. The furniture market is a mass market, with unassailable competitors (think of IKEA, Asta del Mobile, Mercatone Uno, etc … all Brands with billionaire turnover and economies of scale, against which you can NOT compete) However, the furniture you sell can be specific for the kitchen, bathroom, and garden. In this case, you would certainly have less competition and more chances of succeeding. The pastry industry is another niche with several sub-segments. For example, we might have:
- A pastry shop specializing in parfaits and ice creams
- A patisserie specializing in cakes that caters to children’s birthday parties and other events
- A pastry shop for vegans and people with food intolerances
As you can see, there are endless possibilities. The important thing is to use the brain well and, above all, to have a scientific methodology to choose the right niche. In my free resources, you will find a scientific methodology to build your company from ZERO.
The Second Type Of Niche Is To Specialize In A Specific Geographic Location
Many people find it cheaper to go to a business near them instead of going to a competitor that is further away. Indeed, geographic market niches are ways to segment a market based on where customers live, or businesses operate. This strategy is widespread in retail when a high-end store opens on a street corner with three other clothing stores. This means that the store is creating a new niche in the area because it is the only one offering products for a specific price segment. For example, an exciting niche is that of high-quality coffee.
Here in Genoa, some of my brilliant clients have opened a café specializing in gourmet coffee, where you can find unique and super-selected blends. So while all the bars in the city sell “the usual coffee”, they, in a tiny bar in the center (6 square meters …), attract people from all over the city. The niche by geographical position is one of the most “ancient”. Think about it: many famous chains or shops are located only in some regions of the country and not in others (if you find them in many cities, it means that they have changed their business model by becoming a franchise ) Therefore there can be very famous brands in Rome but unknown in Milan.
The Third Type Is To Specialize In A Particular Product Or Service
A product or service niche is when an entrepreneur focuses on a specific product or service. If you are interested in such examples, I suggest you focus on niche products or services that you can provide with high quality. Let’s take lawyers, for example. If you can become a family law expert, people will come to you when they need help in that area. You will no longer be the general lawyer who fights the competition only on price … you will instead be “the one who is familiar with family problems”. Another example is mine. I know this well because I collaborate with some of them, and I often hear these phrases:
- Do you want a website? Shall we
- Do you need social communication? We’ll think about it
- Do you have to send cold emails? No problem!
- Organic lead generation on Linkedin? Massi, we do it all!
- Digital Marketing for everyone! Come on, gentlemen, come on !!!
Too bad that in doing so, my competitors (and clients) do not specialize in anything. And therefore, they do nothing well. Instead, I do one thing: I help entrepreneurs or aspiring entrepreneurs create their businesses from scratch. (and here I’ll explain how to do it step by step)
- I do not do Ads campaigns (unless it is necessary within an overall strategic plan)
- I don’t do websites (other than my full service)
- I won’t help you push on LinkedIn (if we don’t think it’s necessary within the total strategy)
Instead, I do all these things IF they are part of the marketing plan I have created for you, which will lead you to create a company from scratch. In this way, everything I do is inserted in a specific and complete path based on scientific analysis and a particular methodology. I have now tested it many times, and it works.
The Fourth Type Of Niche Is To Specialize In A Specific Target Audience
This example involves targeting a specific subset of a larger market. So you will target a particular group of people with a specific need. The main advantage of this technique is that you can reach your audience in a particular way. This is important because you want to be able to offer your service to people who are interested in it. The main challenge with this technique is that it may be more difficult to achieve an inevitable turnover due to its size. Demographic niches can be divided into the following groups:
- income level
- area of residence
- and many others.
The personal trainer example given at the beginning of the article falls into this category. The auto brands exploit this type of niche (Mercedes is aimed at a public other than Fiat), and all the luxury, clothing and hotel brands.
The Advantages And Disadvantages Of Market Niches
Why It’s Essential To Work In A Specific Niche
- It will help you find your target audience more quickly.
- It will help you create a clear brand for your business.
- It will help you increase your conversion rates and profits.
- It will help you make more sales.
- Personal Branding: People will classify you as a “specific expert” in that niche. So you can get paid more for the same hours worked.
Disadvantages Of Working In A Niche
- Creating a market niche takes time.
- It requires a lot of research.
- requires a lot of planning
- It requires a lot of marketing efforts.
- Requires a lot of “cold blood” (you will have to say no to many possible jobs)
- The most significant difficulty is defining a niche that is wide and narrow at the same time:
- Close so that you can target a specific group of people with your product or service
- Wide so you can attract as many people as possible from that group
How To Find Your Niche
Where to start to find a good niche? How do you find your place in a sea of competitors? And how can you stand out in a crowded market? The first step is to identify what is valuable to your prospects. You have to find out what they want, what they need and what they like. This must necessarily be done with a thorough market analysis However, here are a series of questions that will help you better define your niche:
STEP 1: Identify your product or business idea
- What do you like to do?
- What do you know?
- What are others willing to pay for?
- What can you do better than the competition?
STEP 2: Identify your target audience
- Who needs what you offer?
- Who will your customers be?
- What are their problems?
- What are their goals?
STEP 3: Identify your competition
- Who else is solving their problems in their chosen niche?
- What exactly do they solve?
- What are their products or services?
- How does the competition communicate?
STEP 4: Identify your ranking
- How do you solve your customer’s problem better than anyone else?
- What can you do better than the competition?
- What more can you do?
- How can you communicate your positioning?
STEP 5: Create the perfect offer
- What niche product or service can you sell to solve the customer’s problem?
- How will you share it?
- How will you put it in front of the customer’s eyes?
What you need to do is a mini-market analysis … Once you have solved these questions you should have found potential new ideas, exciting niches and at least a first product idea. But remember: this is only your first guess. You will need to test this hypothesis to see if it has a market response. That is if your audience will buy what you have assumed. If so, your likelihood of success will significantly increase. But that’s another topic you can find in detail in this market test article.
More Questions About Market Niches
Growing Or Emerging Market Niches?
A growing niche market is growing at a healthy pace. It’s still small enough to be affordable but big enough to be in demand and profitable. It has the potential to become enormous and highly profitable while still being manageable and easy to work with. It is precisely halfway between too big and too small. On the other hand, an emerging market niche has the potential to go big. It has high growth potential but is too small to be in demand or profitable. It is a market in the early stages of growth and needs further research and development to become profitable.
However, the direct answer is that it depends on the business owner. A growing market is a great place to start if you’re willing to spend time and money getting your business off the ground. But if you are looking for a quick return on your investment, then it may be best to choose emerging niche markets. There are a myriad of factors that go into a business decision. One of the most common mistakes small business owners make is that they only base their decisions on the profit potential of a business idea. The key to a successful business is looking at all the company’s aspects and weighing the pros and cons before starting a new venture.
Focus on existing niches or create one? Most companies focus on existing profitable market niches, taking the original concept and expanding it to create a new category of products or services. They try to find a way to fill a market need that is not being met. However, it is not always possible to open a new market, and if you try and fail, you can find yourself in a worse position than you started with, with a brand perceived as an alternative. Starting a new business in an existing niche market is a great way to gain an edge over your competition. But it is risky. There is a risk of being too similar to other companies already in that field or not having an effective strategy to stand out.
I believe that if you choose a small enough niche, however, you can avoid both of these problems. The best thing in these cases is the following: find inefficiency in the market and fix it. The big companies of our time (Google, Facebook, Apple, Amazon etc …) did just that: they found something that worked so-so, and they improved it. On the other hand, creating a new niche from scratch can be very interesting and profitable, but it requires enormous studies and marketing skills.
How To Identify A Profitable Market Niche
What is the difference between a profitable and a non-profitable niche? The obvious answer is “an unprofitable business is not a profitable business”. Sure, but there are other main differences between one good niche and one to avoid. A niche to avoid:
- it has little interest and requires a lot of effort to sell
- it is not scalable
- it is not easy to make it automatic (to automate the execution and delivery of the product/service)
- Take advantage of the fashions of the moment
Instead, a good niche:
- It immediately attracts interest and sales
- It allows you to scale both vertically (number of products) and horizontally (number of distribution channels)
- It has high-profit margins.
- It is evergreen (it is based on an ever-present need)
We have seen a good niche market and why you should choose a specific one instead of working on a mass market.I also showed you an articulated plan that allows you to choose your profitable market with a step-by-step methodology. Now, you have to download my guide to building a business from scratch and start your journey as an entrepreneur.