According to Wikipdia, the free encyclopedia, a “niche market is a focused, targetable portion (subset) of a market sector”.

Using this definition, niche marketing is the process of finding and serving market segments, that are too small for big companies to serve them profitably defined by the volume of sales. The key to niche marketing is to find and develop a service or product that is in high demand for the small group of potential customers, but the number of these customers is still high enough, so that you can be potentially profitable nonetheless. The service or product should be selected based on the unmet customer need. To maintain a profitable volume of sales, niche marketers are reliant on the loyalty of customers. To increase the customer loyalty it is important to focus on the quality of the product or service provided, this will generate customer satisfaction, trust in the product or service, and consequently sales.

How to find a niche that is profitable?

The most important and difficult task to do when starting niche marketing is doing site research. As with any business it is much easier to start with something that you are interested in and excited about. Since this is an internet home business, and most traffic (85%) to the websites will be determined by the big three search engines Google, Yahoo and MSN, it is a good place to start your research from. This research should focus on the following three aspects, as described above for a niche market:

High demand: Using tools like Inventory Overture (http://inventory.overture.com) you will be able to find out whether the product you have in mind is wanted. Type in your niche market term describing your product and you will see how many searches for this term and other related terms were done in the past month. The number of searches per month will depend on the niche market, but in general look for terms that are not higher than 20,000 a month.

Low supply: Take the selected terms and type in these terms in the search engines. The results will give you an estimation how much competition there is or how many sites are available on the internet for these niche marketing terms. Ideally there should be a good balance between the number of searches and results a month. As a thumb rule, you should look for terms that have less than 1,000,000 searches per month for Google, 400,000 for Yahoo and 250,000 for MSN. Based on the balance between demand and supply you could reduce the number of terms and narrow down your market niche.

Profitability potential: Once you have the reduced list of niche market terms, you also need to know much advertisers would like to pay for each term. Use for example Google Adwords, and select for the last time based on the results terms with the highest pay per click.

With these definitive niche market terms in mind, you could be able to optimize your website for two or three of terms, by adding relevant content to your site, concentrating around these terms. Because the chosen terms (and related product) have been selected based on three criteria which are typical for a niche market and your research conducted ‘life’ with the three big search engines, you have already all the conditions to be successful in niche marketing. In internet marketing in general, most are aiming for the big fish with a lot of competition. In contrast with niche marketing, you are looking for small fishes. But if you know where they are by conducting sound research, the catch might be greater and more frequently.



By: Diep Tran

About the Author:

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Gav Shannon wrote:

Niche marketing usually refers to small or moderate size businesses or farms that produce a specialty product or service for a limited segment of the market. Market niches can be geographic areas, a specialty industry, ethnic or age groups, or any other particular group of people. Sometimes a niche product can be a variation of a common product that is not produced and marketed by the main marketing firms.

By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. A niche market may be thought of as a narrowly defined group of potential customers.

It is obvious from the table that niche marketing is everywhere. Sometimes the niche served is so narrow that the product is aimed at one small group within a market. One example is the dairy operation supplying kosher milk to a large Jewish population in New York City. The dairy producer hired a rabbi full time to observe the management and milking activities on the dairy so the milk produced can be sold in the kosher market. In this case the dairy producer has a portion of the market to himself.

First of all, you have to understand what niche marketing is exactly. Think about it this way: the Internet is a highly crowded place with millions of people surfing the web at any given moment. The chances of getting your product or business out there to enough people to get a sale are very low. Not to mention, there are millions of online businesses doing the same thing you are trying to market to enough people to get enough sales to make enough money.

Using this definition, niche marketing is the process of finding and serving market segments, that are too small for big companies to serve them profitably defined by the volume of sales. The key to niche marketing is to find and develop a service or product that is in high demand for the small group of potential customers, but the number of these customers is still high enough, so that you can be potentially profitable nonetheless. The service or product should be selected based on the unmet customer need. To maintain a profitable volume of sales, niche marketers are reliant on the loyalty of customers. To increase the customer loyalty it is important to focus on the quality of the product or service provided, this will generate customer satisfaction, trust in the product or service, and consequently sales.

The term “niche” was first used by ecologists to describe a species’ position and use of resources within its environment. When used in business the term implies a situation or an activity perfectly suited to a person or a given type of personality. This concept has been extended from persons to products on the market. Whereas a niche in the strict sense can be a working position or an area suited to a person who occupies it, the market niche is perfectly suited for a product of human labor.

Do it all over again when your niche has grown old. Look at where your market has been and where it’s going. Brainstorm new products and services to add to your business mix and be prepared to respond to change. The secret to successful niche marketing is the ability to grow and evolve with the times.

Niche marketing is the process of finding and serving profitable market segments and designing custom-made products or services for them. For big companies those market segments are often too small in order to serve them profitably as they often lack economies of scale. Niche marketers are often reliant on the loyalty business model to maintain a profitable volume of sales.

By cutting through the competition with niche marketing finding the perfect niche market that they’re overlooking. While a small business may not be able to compete with the giant sites on their level. The truth is, they can’t compete with a good niche site on any level.

Take a look around the Internet niche markets are thriving. Practically every product or service sold on the Internet is part of it’s own unique niche market, a specific field or area of interest. And it’s filled with eager, hungry buyers willing to spend their last dollar on what they are passionately interested in.

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