General Business and Finance Blog

Introduction

            Focused (or Market Niche) Strategies differ from other generic market strategies in that it concentrates most if not all of its attention on a narrow piece of the total market.  The niche can be defined by geographic uniqueness, by specialized requirements in using the product, or by special product attributes that appeal only to niche members.  The key to this strategy is to remain focused on your target niche and not allow yourself to attempt appealing to everyone.  A company can lower its costs tremendously by limiting its consumer base to a very specific target market.  This strategy is extremely useful to small or medium sized companies that lack the capital to take on multi-national corporations.  The costs of starting a business with a clearly defined and specific target market are far less than those one would have when launching a global product or service.

The Idea in a Nutshell

            To say that one person came up with the market niche strategy would be a stretch.  The truth is this strategy has been utilized since the beginning of civilization, whether it was known by those utilizing it or not.  In ancient times, the largest segment of the population was poor laborers.  This is not the market one sets his sites on when attempting to sell luxurious silk gowns, rare jewels, or the latest invention, trinket, or toy.  The small well-defined segment of nobles was the target niche of ancient times.  One might think that a lot has changed since then, but the truth of the matter is companies such as Godiva Chocolates, Chanel, Gucci, Rolls-Royce, and Haagen-Dazs successfully utilize differentiation-based focused strategies targeted toward particular segments wanting top-of-the-line products and services who are willing to spend more to get the best.  The target market does not have to be wealthy; this is just one example. 

A focused or niche market strategy is one that provides products or services that uniquely appeal to customers in a narrow segment of the market, rather than attempting to appeal to that particular market as a whole.  Community Coffee, of Louisiana, holds a mere 1.1% share of the U.S. coffee market, but it has reported sales in excess of 0 million by appealing to a narrow well-defined market.  In addition, Community Coffee holds a 50% share of the coffee market in the Gulf-Coast region where it is distributed.  The internet is quite possibly the perfect medium for launching a market niche strategy.  Businesses such as Google, E-Bay, and Match.com went from being ambiguous companies to household names in a matter of years. 

The Top Ten Things You Need to Know About Focused (or Market Niche) Strategies

1.            When employing a focused market strategy, keep your consumer-base down to a well-defined and specific segment of the market, avoiding the temptation of trying to appeal to broad interests.

2.            When utilizing a focused market strategy, beware of competitors trying to match your firm’s capabilities in serving the target market.  They will attempt to find effective ways of appealing to your buyers with imitation products or services.

3.            A focused market strategy is best employed when the specific target consumer-base is large enough to be profitable and offers good growth potential.

4.            Your firm stands a greater chance at being profitable if you offer different products and services to a specific group or segment of consumers that have unmet preferences.  These customers will be loyal to your business for catering to their unique needs, and they will think of your company first when others ask them where they got such a specific product or service. 

5.            Ferrari markets its 1,500 automobiles sold in North America every year to a clientele of only 20,000 highly lucrative car admirers.  Only those in the highest tier of this exclusive group were contacted by Ferrari for a chance to put their names on the waiting list for one of the 20 .1 million FXX models.

6.            A quick a decisive strategy should be employed when targeting a narrow segment of any market before consumer preferences tend to drift.

7.            A hyper-focused strategy is best maintained in those industries in which the leaders do not see having a presence in the niche is critical for their own success.  This reduces the risk of smaller businesses having to battle it out against some of the industry’s strongest competitors for a share of the market.

8.            Over-looked or undervalued market segments are prime territories for employing a laser-focused strategy.  Because these consumers are undervalued by other competitors in the industry, the chances of your consumer-base remaining loyal for the long-term are greater.

9.            Use caution when entering markets where segments may become so alluring it is soon flooded with competitors, augmenting conflict and disintegrating segment profits.

10.            A laser-focused strategy can be actualized if there are social and cultural differences within one community that may call for changes to be implemented in a product or service. This invariably produces a niche market.

The Video Lounge

http://www.youtube.com/watch?v=PHhfDkLrOpA

Guy Kawasaki discusses the key success factors that differentiate a strong niche marketing strategy from a poor or run-of-the-mill one.  The two main areas he stresses to be strong in are the ability to provide a unique product or service to the customer and for that product or service to provide value to the customer.

My Take

I think focused or (market niche) strategies are extremely valuable today.  This would be the ideal strategy to implement for any fresh college graduates looking to start an entrepreneurship.  In addition, the internet offers an abundance of channels to get a small firm up-and-running without much startup capital.  This lack of startup capital is another reason why utilizing this strategy is favorable when entering a market or industry with large corporations.  Some of the main points I got out of this were to keep your target market down to a specific and narrow market segment,  market segments that are overlooked or undervalued are the prime meat for employing a market niche strategy, and that this strategy is best maintained in those industries in which the leaders do not see having a presence in the niche is critical for their own success.

References

Jaquier, B. (2003). Focus and niche strategies. Retrieved from http://www.ecofine.com/strategy/Focus and Niche stategies.htm

Marketing niche strategy. (n.d.). Retrieved from http://www.smallbusiness-marketing-plans.com/marketing-niche-strategy.html

Mendoza, M. (n.d.). Focus on your niche. Retrieved from http://www.powerhomebiz.com/vol62/niche.htm

Niche strategy advantages. (n.d.). Retrieved from http://www.marketingtitan.com/niche_strategy_advantages

Thompson, A, Strickland, A, & Gamble, J. (2010). Crafting and executing strategy: the quest for competitive advantage. New York, NY: McGraw-Hill/Irwin, 156-160.

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

Contact Info: To contact the author of “Top Ten Management on Focused (or Market Niche) Strategies,” please email Gabriel B. Ordoyne at w0449274@selu.edu.

Biography

David C. Wyld (dwyld.kwu@gmail.com) is the Robert Maurin Professor of Management at Southeastern Louisiana University in Hammond, Louisiana. He is a management consultant, researcher/writer, and executive educator. His blog, Wyld About Business, can be viewed at http://wyld-business.blogspot.com/. He also serves as the Director of the Reverse Auction Research Center (http://reverseauctionresearch.blogspot.com/), a hub of research and news in the expanding world of competitive bidding. Dr. Wyld also maintains compilations of works he has helped his students to turn into editorially-reviewed publications at the following sites:

Management Concepts (http://toptenmanagement.blogspot.com/)

Book Reviews (http://wyld-about-books.blogspot.com/) and

Travel and International Foods (http://wyld-about-food.blogspot.com/).                

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

First step: identify your niche market

One of the biggest problems that are frequently being seen is that many people try to start creating a website without really understanding how the internet works. A crucial step which is often ignored or overlooked by beginners is market and niche research.

In this article I will be looking at a number of important concepts relating to market and niches. This includes:

What is an online market?
What is a niche and how does it relate to a market?

When you initially begin exploring the online marketing word, you will frequently hear people discussing various online markets. The correct definition of a market is a group of people who have a common interest in a specific topic or activity. To facilitate communication between the members, this group will often use their own specific phrases and terminology.

Markets

The most effective way to “grasp” the concept of a market is to take a look at a concrete example:

The “gardening market” is made up of people who have an interest in things related to gardens. Some examples of the jargon used by members of this market are: pollination, tap root, damping off, drop spreader, fastigiated, etc. Unless you have an interest in this subject these words will not resonate with you.

Once you understand the basic concept that a market is an online community with its own vocabulary and terminology, you will swiftly come to realise that there are hundreds and may be thousands of markets waiting to be discovered.

Niches

Inside each individual market, there are numerous niches. A niche is a distinct segment of a market.

What is the difference between a market and a niche?

To follow up with the previous example, members of the gardening market might be interested in the following:

growing flowers
landscaping
tree surgeon
vegetable gardening
gardening supplies, etc.

Every single one of the above topics is actually a niche that could be a specialized interest to members of the gardening market.

Niche marketing is therefore identifying a segment of a market and then developing a solution for the needs of that segment.

Micro niches

Microniches are niches within niches. For example, within the “vegetable gardening” niche a microniche might be “vegetable gardening without pesticides” or “growing winter flowers” within the “growing flowers” niche.

The key reason why we search for microniches is that they generally tend to have significantly less competition, which in turns makes it easier to obtain better search rankings in Google.

Click the link here to receive more advice and get your free Video course: Create Your Own Website – The Entire Process.

The biggest error that most newcomers to internet marketing make is to find their product first and then seek a market for it. They devote a lot of time looking for new undiscovered niches. This is actually the wrong way to go about it and unfortunately is a waste of both time and energy, particularly when you are just starting out. It should actually be the reverse.

The most effective method is to find first a market that you want to focus on and secondly find a product for this market.

WHAT EXACTLY IS A NICHE?

It is a terminology frequently utilize by web marketers and it is defined as being a unique group of individuals who are searching the internet for an answer to a specific query or problem. Basically it is a particular section of a market.

Unfortunately beginners devote considerable time and effort trying to find brand new and undiscovered niches. There are even some online products promising to show you “how to find an untapped niche”. Please don’t even think about doing this! Only once you get more established and understand a lot more about internet marketing that you can then contemplate experimenting with more diverse niches but certainly not as a newbie.

When trying to find a niche, you can first determine an “overall market” and then extract a particular section of that market. You will then create a website around this specific segment of the market.

There are three major markets that are widely prominent and have a huge amount of individuals eager to purchase their products and services.

The truth is that you could spend your entire online career within these 3 markets and never have to worry about finding a small untapped niche. In essence it is the basic law of supply and demand. If you can find what people are searching for and you can then supply it you will be in business for ever. So why make it difficult on yourself?

The big 3 markets are:

Health
Lifestyle
Wealth

Those huge markets have tons of niches and can be broken down further as follow

1) Health

Increase energy, Loose weight, Diet, healthy eating, skincare, medical procedures, quit smoking, headache relief, children’s health, hair loss…

2) Lifestyle

Mind body and spirit, dating, personal development, computer games, how to sell your house, online study courses, self improvement, pets, relationship advice, spirituality, pets, motivational, DIY, divorce, etc.

3) Wealth

Work from home, Internet Marketing, debt relief, government grants, online trading, credit card, start your own business, mortgages, business opportunities…

Now scrutinize closely the niches found in these 3 markets. Is there any subject that you are passionate about, excites you or that you are already family with? Choosing a subject that you like is extremely important as it will help to keep you motivated.

Once you have found your particular niche you can then build your website around it. Remember you only need to do well at one niche to have a successful online business.

WHERE TO FIND PRODUCTS

The next step once you have selected your specialized niche market is to search for a product to market to it. There are thousand of online websites showcasing tons of products.

Among the most popular are: Commission junction, Sharesale, ClickBank (biggest place for digital product), Clixgalore, HD publishing, Market health.

Additionally, what I personally did when I wanted to make my own website was to do a through Google search on products in my particular area of interest in order to find out what products people were promoting.

Click the link below to get more top internet marketing strategies today.