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5 Breakthrough Marketing Ideas
Do you ever get frustrated with your marketing? Are you putting in a lot of effort but not getting the results you want? Don't you wish you could just hit a switch and get a better response from your mailings, sales calls and web site? You hear a...
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Word of Mouth' Marketing
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Small Business Marketing Series – Choosing a Niche Market

Ó Ben Botes 2003 - 2005

Many smaller businesses choose niche markets for various reasons and these niche markets can be very lucrative. This article will look at ways to identify and assess whether they are right for your business?

For many smaller businesses it is important to have a focused strategy which enables them to operate in a small part of a chosen market with great success. This has a further advantage of giving the smaller business a way to compete with larger organizations and achieve a level of protection against competition.

How is it Relevant to You as Owner?
As the owner of the business, you decide on the business strategy and make informed choices as to where the business will be going. Being clear on possible niche markets or a niche focus of your business can be crucial to the ultimate success and sustainable growth of your business.

The advantage of operating in a niche is that you can specialize in a small market and hence become a leading supplier of that specific product or service.

Niche marketing can be extremely cost-effective. For instance, imagine you offer a product or service that's just right for a select demographic or population group in your area, such as South Africans or students. You could advertise in newspapers or websites that focus on them, which have considerably lower rates than stations that program for broader audiences. So your marketing budget would go a lot further, allowing you to advertise with greater frequency or to use a more comprehensive media mix. Taking on a new niche can be a low-risk way to grow your business, as long as you keep in mind several important rules:
Here are a 4 steps to consider when choosing a niche market.

Step 1
Being Clear

The first step in almost any process is being clear on what you are doing. Processes like this can take time and money to complete and as a small business owner both time and money are valuable resources that should not be wasted.

Ask yourself: What do I want from this process, how exactly am I going to accomplish it, what resources do I need before I start, who will manage the process, how will I know when its done?

The steps to be followed in the first phase could be as follows. It may vary from one project to another.

Convene a meeting with the stakeholders of the project and identify the exact aim and required outcome of the project.

Assign a project manager to assist in the development for the project.

Identify potential team members required to support the proposed solution.

Convene a proposal review meeting with potential team members to identify: proposed creative approach; scope of work, potential number of effort days; resource requirements; technical requirements; and other issues to be addressed in the proposal.

Produce a work breakdown diagram, proposed budget and resource requirements list considering steps 2, 3 and 4 bellow.

Note:
This phase is extremely important. A good carpenter always measures twice and cut once. This step is about specifying what the measures will be.

Step 2
Doing Your Research

Analyse other businesses operating in your market and the products or services they offer. Do their products or services attract a wide range of customers or just a few targeted ones?

Use this analysis to decide what degree of specialization your product or service calls for. Will operating in a niche mean alterations to your product


or service? Can you offer flexible service solutions?

Identify areas where customers’ needs aren’t already being met and look for competitive edge by adding features or offering a value-added service that isn’t currently available.

Conduct research to see if there is a group of customers that your competitors are failing to reach and consider how your product or service could be updated or adapted to attract them.

Explore how your customers buy from your competitors. Can your product or service be sold in a different way – over the Internet or through a mail order catalogue? Once you’ve completed this analysis use the information to identify customers that have things in common and things that make them different from others buying in that market. Then create a profile of these customers and use this as the basis of market research to ensure the niche is viable.

Step 3
Appeal to Your Customers

Now that you have a good idea of what your target group want, it is up to you to make sure that you appeal them. Meet their unique needs. The benefits you promise must have special appeal to your market niche. What can you provide that's new and compelling? Look for ways to tailor your product or service to meet the unique needs of your prospective clients.

Say the right thing.
When approaching a new market niche, it's imperative to speak their language. In other words, you should understand the market's "hot buttons" and be prepared to communicate with the target group as an understanding member--not an outsider. In addition to launching a unique campaign for the new niche, you may need to alter other, more basic elements, such as your company slogan if it translates poorly to another language, for example.

In instances where taking on a new niche market is not impacted by a change in language or customs, it's still vital to understand the key issues and how they prefer to communicate with companies like yours.

Step 4
Test and Review

Step four is to test and review. Always test-market. Before moving ahead, assess the direct competitors you'll find in the new market niche and determine how you will position against them. For an overview, it's best to conduct a competitive analysis by reviewing competitors' ads, brochures and Web sites, looking for their key selling points, along with pricing, delivery and other service characteristics. But what if there is no existing competition? Believe it or not, this isn't always a good sign. True, it may mean that other companies haven't found the key to providing a product or service this niche will want to buy. However, it's also possible that many companies have tried and failed to penetrate this group. Always test-market carefully to gauge the market's receptiveness to your product or service and message. And move cautiously to keep your risks manageable.

By now you should have a pretty good indication of which niche market you are going to focus on and whether this is the right market for you. Remember what you have learned from your clients, be responsive to them and trust your research.

About the Author

Ben Botes is an author, entrepreneur and expert speaker on new venture creation. He is also the founder of http://www.my1stbusiness.com a web portal for 1st time business owners and entrepreneurs. Visit my1stbusiness.com today for the most extensive range of small business resources, courses, articles and tools, designed to unleash your entrepreneurial spirit.

 

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