A niche market is a boon for a firm or business if identified and capitalized properly with substantial research. At the same time, it also considered risky as it is dependent on a very small target market and promotes very focused and limited products and services. Keeping in both the scenarios, it can be said with ease that many firms and businesses consider an online niche to be profitable marketing strategy. As a matter of fact, big companies who rarely exploit the markets are engaging heavily in the exploitation of the markets in recent years. There are several factors or advantages that compel firms to make use of the markets.
1) Low Competition
Niche market focus on a specialized market whereby a seller tailors a limited variety of products that are offered to a particular segment in a society. Since, these tailored products are not being offered by any existing firm, the seller enjoys the freedom of less or zero competition. For instance, if a product is car that runs on water or hydrogen rather than the conventional fuels like oil, gas and diesel, it instantly make your product very specific and unique. Simultaneously, the product emerges as the important contender to the large car manufacturers and due to this you can manage to take away a healthy segment of the society without any pressure from the big companies.
2) Low Start-up Costs
As the products or services offered by the business are limited, the start-up costs are low compared to the general products. This is considered to be one of the huge advantages for the firms. The need to spend heavily on a product or service is greatly reduced as your entire focus is on the product. In this way, there is better allocation of funds especially in the specialization process. In reply to the large assortment of products offered by big companies, firms devote their attention and finance in gaining customers and cementing their presence in the market. Moreover, it prevents the need to find solution for all the problems. Rather, it enables you to focus on one product and put your entire efforts in enhancing the characteristics of that product or service.
3) Customer Selection and Satisfaction
In niche marketing, the products or services offered are undoubtedly limited. However, the product or service has the specialized nature that plays a major role in raising the chances of customer satisfaction and retention. As customers who are on a lookout for these kinds of products, after availing them, there is very little chance of any encounter between them and the company. Even if there is any hint of disagreement, it is instantly resolved. In this way, it not only increases efficiency by removing unsatisfied customers, but it also builds customer’s confidence, trust and eventually loyalty. In other words, it can also be said that business depends more on customer’s loyalty than the quantity of the customers.