The riches are in the niches.
That’s a truism I often cover in great depth when I’m doing a keynote presentation for an industry group or business conference. I also discuss the importance of differentiation. Niche marketing and differentiation are closely related, but not the same, and to mistake one for the other can be disastrous to your business plan, so let’s look at some examples to help you get a feel for how they diverge.
From the mobile phone world
Consider a mobile phone with an edge display vs mobile phone with oversized buttons and simple operating system. These are products that currently exist in the marketplace. The first – the phone with the cool display that goes around the phone’s edges – might be purchased by almost anyone. It’s just a matter of personal preference and affordability. However, there are other expensive phones on the market; in this case the display makes it different from most of its competitors. This is differentiation.
The second phone is designed for senior citizens who want a phone that is easy to understand and operate. This group is definitely a niche market.
You can easily see how understanding each of these mobile phones in relationship to marketing is critical. A company could market the edge display phone almost anywhere other phones are being marketed. However, the phone for the senior market would benefit from a much more targeted and specialized approach.
From the banking world
If you live in an area that has a major sports franchise there is probably a bank in the area that offers a credit card with the team’s logo on it. The interest rate and fee for the card is probably identical or about the same as any other standard consumer credit card. The pro-sports-team graphics help differentiate it from other cards. It gives the bank a “hook” to use in advertising and marketing materials – but those materials would be suitable to use anywhere credit cards are generally marketed.
However, the Ritz-Carlton Rewards Credit Card is a different animal. It comes with a hefty yearly fee of some $400, but if you stay in that hotel chain (a lot!) it offers some excellent rewards. This product is certainly geared to a niche market. The company would never advertise this card alongside general consumer-level credit cards.
From the food industry
Several years ago, we may have considered gluten-free foods to be a niche market, and compared to all food sales, it probably still is. However, it has grown so much that many of the global food brands are now marketing gluten-free products. If you’re selling packaged food, it is no longer a niche market. If you’re a local bakery, offering and promoting gluten-free items would help differentiate your operation.
But let’s not give up on finding a gluten-free niche market. I would suggest that gluten-free kosher products or gluten-free “soul food,” would offer niche marketing opportunities.
If I were featuring your product or service here, where would it go? Does it appeal to a specific niche, or does it have some features that allow you to differentiate it from more “generic” offerings?
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