Business owners thinking about specialising their products and services to target a niche market should know the benefits and risks of this business strategy. Niche marketing is the business strategy of targeting a specific subset of a market.
Here are some benefits and problems of niche marketing that will help you build a business strategy right for you.
Niche marketing can provide the following benefits:
- Less competition as the base of interested customers is narrowed
- Increase brand loyalty as you are providing goods or services difficult to find and customers are more likely to return to invest
- Gain a higher profile among the interested customer base as the target market and competition is small, more people are likely to know your business name
However, niche marketing has its pitfalls you should know before you specialise:
- The smaller market makes growth difficult as there is not a large customer demand
- You increase the risk of your business failing if there is a disruption to your niche market, for example, if a larger company joins the competition or the good or service you provide becomes obsolete due to innovation