I remember visiting a small food joint near my university. I was witness to the launch and have seen it grow to a very successful single-unit quick service restaurant within a few years. It was launched in a small garage which enjoyed close proximity to t
I remember visiting a small food joint near my university. I was witness to the launch and have seen it grow to a very successful single-unit quick service restaurant within a few years. It was launched in a small garage which enjoyed close proximity to the busiest shopping complex, office complexes, a school as well as university campus. There were numerous other restaurants in the same locality. This restaurant offered authentic Tibetan food, momos and thukpas. Not that the other restaurants and food joints did not offer momos. But this food joint had a special Tibetan appeal in its ambience which the others lacked. Moreover, the very quick service of a steaming hot platter of aromatic food at an affordable price appealed to college-goers as well as the office executives, who often crowded this place during lunch time.
The next year, it launched a `live Mexican counter`, where the food was made in front of the customers and they could choose the toppings and the sauces. Every year, they launched something new and made sure that it was unique. It is not that they offered anything different as far as the food is concerned, but they made sure they got an edge over the rest in some way or the other.
The restaurant owners clearly targeted the college students and nearby office-goers who wanted to eat out yet remain within a fixed budget. He made his product customer-centric, keeping in mind their budget, time constraint of respective office and college lunch hours as well as their taste and preferences. He wouldn`t have minded entertaining a rich customer but he kept his product and services focused on a niche market.
What is niche marketing
A business that focuses on a niche market is catering to the need for a product or service that is not being addressed by other mainstream marketers. A niche market may be defined as a narrowly defined group of potential customers.
The profitability of such ventures is high owing to the disinterest on the part of large enterprises and lack of awareness on the part of other small companies. The key to specialising in this field is to find or develop a market niche that has customers who are accessible, and that is growing fast enough.
Prabir Chatterjee, MD, Adora Diamond Jewellery, says, “While starting a business, before launching a product or service, ask yourself: who is the product or service meant for? The answer to this particular question will tell you what the product should be like, how it should be packaged and how should it be advertised.” And answering this question will help you identify your niche.
Why it is important
Today`s world has become over-communicated and hyper-competitive, with a vague similitude all around. If you attempt to be too general or too wide in your approach, you will only fritter away among this vagueness. And people will not find any greater value in buying from you than in buying from your competitor.
One of the greatest errors committed by most new businesses is that they fall into a trap: they try to sell "all things to all people." This approach of making a mass appeal might seem to be a good idea as the more people you target as your potential customers, the chance of making sales is more. And for a new business enterprise, this strategy is justified as any new business thrives on the number of sales it makes.
However, niche marketing may give you a sluggish growth in the beginning. But it will help you grow stronger as you approach the market with a small group of customers and gradually spread the awareness of the product to pull in more and more customers.
To put it in the words of D.P.S Kohli, Chairman, Koutons Retails, “Don`t try to be too different but be different than others. Find your cutting edge that sets you apart, gives you a profound identity. The market is almost saturated. But if you specialise in a niche product, that will help you survive in this highly competitive market.”
Focusing on a particular niche will also ensure proper streamlining of your money, time and energy. The customer base is diverse these days owing to their age, profession, economic condition and background. If you concentrate on a particular group, you can streamline all your resources according to the taste and preferences of that group.
How to identify a niche
Here are some points to help you identify a niche:
Evaluate your potential
The other name of finding a niche is to specialise in one particular sector. And in order to do that, you should know what you like to do. Evaluate your forte and interest to see whether you can make use of it in running a profitable business enterprise. You should be passionate about your venture. Your passion will fuel your desire to make it unique and stand apart in the market. It will make sure that you work towards making it the best in the industry, no matter what it takes.
Find a gap
Everything can be sold somehow, in some way or the other. It is not difficult to decide what you want to sell, but it is more important to decide or identify whom you want to sell. Look for a market that can be easily targeted with an easily identifiable need -- a need for a specific product, be it a product or service -- and provide them with that product.
In order to achieve this, you need to be observant and do a thorough market research. Try to identify what is lacking in the market. If the customers are asking for a specific product or service, there is a niche that needs to be filled. Find out potential buyers who know what they want and are buying it somewhere else. Cater to the existing need of the market. Once you have identified a niche, everything will flow from that point. It is easier to fill a need than to create one. Don`t create a niche. Rather, find one and fill it.
Finding the right target group will help you identify your niche better. Follow market trends. Try to analyse the customers` psychology. Today, people are ready to spend for a quality product that makes their lives easier. As a new entrepreneur, you should always ask yourself, what is it that you offering which will make things easier for your customers. There is always space for something new in the market. No matter how much saturated a market is, there is still scope for new and innovative products and services.
For instance, if you have a book store, it is a good idea to equip it with some chairs or tools so that the customer can sit and browse through the books before making up his mind to purchase it. To make it more customer friendly, you can add a small cafeteria which will ensure that your customers spend more time browsing through the books while you also make a profitable utilisation of the extra space in your shop.
How to capture the market
Capturing the market is an important aspect of your business. Here are some ways to achieve it:
Be different from your competitor
Try to be different or unique in some way or the other. Go to the other shops in the market and find out what is lacking. Ask yourself, why a customer should visit my shop leaving out the rest of the shops in the locality. If you offer a customary service that your competitor is also offering, it doesn`t appear as customary anymore. Rather than following what your competitors are doing, you should isolate yourself from them.
Specialise in your product
Expertise is in the eyes of the niche. Specialisation is in itself a marketing process that, as a byproduct, generates the perception of expertise. It`s amazingly effective in creating a top-of-the-mind awareness among a specific target market.
As more businesses get started, and the more inundated with marketing messages our society becomes, the less time, energy and money people will have to spend in choosing the companies. Thus, specialisation helps to solve that problem by projecting an aura of expertise. By finding and dominating a niche, you can become an expert by design, not by default.
Magpie is designer steel ware that is an offshoot of a family- owned business. An exclusive range of high-end products, no one could imagine it would receive such an enormous response when it was launched in the departmental stores and multi-brand outlets. “Though the thrifty housewife may ponder over the price tag, the savvy one realises that classy stainless steel ware is an intelligent buy.” That justifies that there is a market for everything. All you need to do is identify the evolving market for your product.
Arun Garg of Magpie predicts that the market will soon be flooded with hi-design steel products. "Before that happens," Garg says, "we want to make sure that we have established our brand as number one."
When you deal with a specialist, you are much more at ease than when you deal with a person who has an ordinary and overall approach. Consider doctors, for that matter. If you have a problem in your eyes, you would prefer to visit an eye specialist than go to a general physician. Same is the case in business; specialisation gives you more authority in your own sphere. So, if you are consider selling products for home décor, a special range of exclusive lights and chandeliers would fetch you more business rather than offering a mix of assorted home décor items.
Establish your USP
After identifying a specialised or niche market, it is time to establish your USP (unique selling point). Establishing your unique selling point will help you evaluate how you will make your business uniquely different from that of your competitors. Finding the USP is something that new business owners need to do to set their item above the competition. This will help you give a unique reason to your customers to buy from your shop. Identify an aspect or utility of your product that is not being offered by your competitor and promote it through an efficient advertisement campaign. For instance, Domino`s Pizza`s unique selling point is delivering the food within 30 minutes of the order being placed.
Once you have specialised in a niche area, take up a smart marketing strategy that will help you build up awareness for your product. I know a person who deals with ceramic crockery and kitchen ware. With every piece is attached a very small tag which speaks about the potter who has made that piece of pottery. This is coupled with a tagline that reads, `With every item you buy, you lend a helping hand to a potter.` This plays well on the customers` psychology, who are aware of the benefits of using eco-friendly products and also the economic conditions of the potters. This, coupled with the unique design, makes it a complete package for both the international and domestic markets.
Cons of being an innovator
If you are the first one to launch a new product or service in the market, be prepared to take in your stride some ordeals that come with it. While it is not wrong to be an innovator, it is advisable to venture only if you have deeper pockets. Anything new in the market needs time to be accepted by the customers. A lot of trial and error is required which involves both money and time. If you are not financially well-equipped, try to join hands with a funding company. However, make sure to patent your product or idea in order to avoid duplication of the same. So, arm yourself with innovative ideas and smart marketing strategies before hitting the market.
Identifying the niche is crucial while developing a marketing plan. By identifying and analysing how efficiently you can cater to your niche market, your marketing plans become more effective.
There is a saying –– `You cannot be everything to everyone`. The same theory is applicable when it comes to carving a niche for your business. You cannot cater to `all`. Failure to identify a niche can lead to the wastage of marketing funds, time and energy. You cannot sell something that is meant for everyone. Rather, start with a small target group and gradually expand your product range in order to get a mass appeal.