Enterprise Mastermind

What is a niche market and why do I need to find one?

With recession looming and predicted to last at least the next 2 years, more and more individuals and businesses are quite rightly deciding that now is the time to diversify. I have done it myself, blogging is only a hobby for me and my day-job is running my own Website Design and Development company, but realising that times are going to be tough and bills will still need to be paid, I also run an online store selling videogaming equipment and sell photographic services alongside my Website Design. The choices I made when deciding how to diversify were easy for me, both of these other businesses closely relate to my hobbies (being a keen videogamer and photographer in my spare time) and my Website Design skills enabled me to get them online with considerable ease.

It may not be as simple as that if you decide to start up a new business in your own spare time though and finding a market for a business that is going to be profitable is a tricky thing to do. Many markets are already saturated and getting a foothold and exposure in these markets can be a time consuming and cost-ineffective endeavour.

“Why find a niche market?” I hear you say. “Doesn’t that just limit the people I can sell to?”
Not at all. In fact, finding a niche market and marketing specifically to that niche is one of the most important things to get right in any Internet Marketing Strategy. Once you know who it is you are marketing to it is easy to spend your energy and money on the right things.

Here’s a simplified example:

I am asked by a garden building manufacturer and retailer in Manchester to come up with an Internet Marketing Strategy. They are not selling enough Summer Houses. The first thing I ask them is “Who do you market to?” They tell me “Anyone who wants a Summer House.” Now the chances of someone coming from Birmingham to purchase a garden building in Manchester is slim. So instead of wasting money and time marketing to ‘anyone who wants a Summer House’ I tell them they would be better marketing to “anyone interested in buying a Summer House within 50 miles of Manchester”. By narrowing their niche market down they now know where to spend their time and marketing money and are now at an advantage over the other garden building retailers in the Manchester area who are still selling to ‘anyone who wants a Summer House’.

Finding and defining a niche market before you start any Internet Marketing Strategy is important for the following reasons:

1. By targeting a clearly defined niche market you will know exactly where to advertise and where to look to find related sites that cater for your market therefore maximising your marketing budget.
2. You can build a website that caters specifically for your niche market. This makes Search Engine Optimisation easier and enables you to target your niche market effectively via the search engines.
3. By knowing your niche market, it will be easier to develop new products and services to cater for that market.
4. With time and effort you can become a market leader in your chosen niche.

Coming in Part 2 – Finding your own niche market