If you are a marketer, a post about niche markets may not be something new but nothing is further from the truth.
The search for new market niches to increase the scope of a business is one of the most important tasks and one that our clients require the most, whether they are already starting a business or starting from scratch.
Therefore, in this post, I am going to talk to you about market niches and how to discover new profitable niches for your business, the great challenge of all entrepreneurs and/or marketing experts.
What are niche markets?
First of all, it is necessary to do a little analysis about what a market niche is in order to understand its importance and the way in which new niches can be found.
What is a market segment? It is a large and homogeneous group of buyers in a market that share common characteristics and needs.
What is a niche market?
Definition of market niche
A market niche is a part of a market segment in which consumers share common characteristics and needs and do not have their needs fully covered by the general offer offered by that market segment.
Niche Market Niche Market Niche Market Niche Market Niche Market Niche Market Niche Market
What are niche market research and analysis?
Market niches seek to meet their needs in another way and that is where the analysis and search for new niches and the company’s ability to specialize in order to meet said demand come in.
On many occasions, new business opportunities are discovered since a possible profitable market niche has been found, but that does not mean that the company is ready to open its range of products/services.
In short, that the company must be willing and have the ability to open its offer or catalog of products/services and segment into other more specialized niches with the investment that this requires.
What are the characteristics of a market niche?
The characteristics of any market niche are the following:
The consumers that compose it have a series of more specialized demands than normal, so in order to meet this demand the company will need to specialize in order to obtain profitability from the market niche.
It is a group of consumers that is smaller than the market segment to which it belongs because such specialized demand is not covered by the main suppliers in the sector.
And it is that, contrary to what happens with a market or a market segment, it must reach a much smaller audience of consumers, entities, and companies that have more specific needs (that is, a highly segmented audience) and that They are really interested and have the economic power to become clients of the company. In fact, the perfect thing would be for that segmentation or specialization to make your target audience pay more for what they offer.
Closely linked to this point is the need for the public, although it is much smaller than in a market segment, to be sufficient and adequate to be able to offer the profitability that is expected from the business in question.
In short, a lot of segmentation but with a sufficient audience.
The company must find a way that consumers in the niche market are willing to pay for the solution proposed by the company.
In order to be considered as such, a market niche must be planned and developed in a market of free competition.
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Example of a market niche
Let’s say there is a market aimed at satisfying the needs of certain “vehicle” consumers.
Over time, a group of consumers in that market wants to meet their needs in a different way, since the current ones do not fully satisfy their wishes.
Therefore, they have a need for a different type of vehicle.
For example, they are looking not for a gasoline car, but for a vehicle that runs on another type of fuel that is cheaper and cleaner.
And that is where the niche markets for electric vehicles, hybrids, and biodiesel are born.
With this same example, we could formulate new ideas such as family, mixed, off-road and sports vehicles, etc.
Market = Vehicles
Segment = ATVs
Niche = SUV or SUV
Micronicho = CrossOver
What aspects must be taken into account when finding a new market niche?
When looking for a market niche and discovering a possible profitable business, a series of premises must be taken into account to determine if it is finally interesting or if it is a mirage.
There are many more aspects to consider when finding a profitable market niche, but generally speaking, these are the most important.
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1.- Check if there is competition in the said market niche
This is a fundamental aspect to check if a niche is really interesting or not.
You might think that the lack of competition will be a competitive advantage and you are right.
If you are the first to detect a latent need that is unmet by other providers that are really profitable for the business, you have found a gold mine.
That is, there is demand and therefore those competitors are present in the niche in question.
The problem is that the lack of competitors can also indicate a lack of profitability of the market niche:
Well, they have left it.
They have analyzed it well and have seen that it was not profitable for them.
Therefore, it is best if a market niche is not yet saturated with competitors to penetrate it, but neither should it be the only one who risks and bets on it, unless it is a completely new and profitable niche, in which case, you will have found an ideal business opportunity.
Market Niches – Ideal Business
2.- Determine the potential and profitability of the market niche
This is another fundamental aspect to find suitable market niches for the company.
It is for this reason that it is necessary to find out, inquire, investigate, analyze, measure, and make sure that the chosen market has the potential to generate profits in your business.
For this, the study of consumers is essential.
In this way, we can know their characteristics, desires, and what satisfies them, the way in which their need will be met, the way in which they will be reached, and so on.
3.- Analyze existing entry barriers and business strengths
It is also essential to know the strengths of the business, to determine its ability to penetrate this market niche.
That is, if it has specialized personnel for this purpose, if it has the necessary investment for it, and so on.
In addition to this, the existing entry barriers must also be taken into account, in order to determine the possibilities of the business, the inconveniences that it would have to face, and those aspects that may negatively influence its development to adopt the measures and solutions. most appropriate in each case
Why is it so important to discover new market niches for a business strategy?
Discovering new market niches offers several advantages and benefits for a business strategy:
Detecting a market niche can bring a lot of profitability to a business
This is because you will be able to broaden your scope and expand the range of products/services that you offer or specialize in them, thus differentiating yourself from your competition.
At this point, it is important to comment that specialization in a market niche is not synonymous with lower income or lower profitability.
It is possible to generate more income and obtain a higher profit margin with a smaller clientele if you plan well, have a well-focused product/service, and/or little competition for existing demand
Moreover, the more specialized the market niche, generally the higher the price of the product or service offered, since consumers will better cover their need and, therefore, the greater the commercial margins and the turnover of the business may be, although this will depend on multiple factors that I am not going to deal with here, since the post could go on forever.
Marketing strategy is noticeably simplified
Since all campaigns can be focused in a much more effective way to a better-defined target audience.
Specialization offers the advantage of being able to avoid large competitors
Generally, these large competitors are present in the global market.
This is because large companies need large sales volumes for their specialization to be profitable and a strong adaptation to satisfy the needs of a smaller group of consumers, something that makes a highly specialized market niche not entirely attractive. for these.
It is easier to become an expert in a specialized market niche
Authority, popularity, and recognition are essential today, especially on the internet.
For this reason, it will be much easier to know and access the places where potential customers move and, in this way, reach the end customer because their needs and the ways to cover them in the most efficient way can be determined. satisfactory possible.
This occurs by focusing that business area on a specific group of potential customers, with whom you share as an expert in the field, a series of thoughts, desires, objectives, and needs, the level of risk is reduced and the connection capacity increases. with the increased sales in this way.
Not everyone can be your potential customer. It is not realistic to try to meet everyone’s needs in the same way.
In a niche market, the competition is usually less
And for this reason, generally, customer loyalty is almost automatic, since it will be more difficult for them to find another provider that meets their needs.
Because of this, you will have a greater chance that they will rehire your services or buy your products.
Online tools to detect possible market niches
Google Keyword Tool Planner
It is a great tool to analyze the traffic of the search terms most used by users on Google when it comes to finding the product or service offered by the company or that it wants to offer to cover the detected need.
It is also very practical to know and detect possible search terms that represent new business opportunities for the company since it allows us to check the level of competition present, as well as the commercial interest that it arouses in them.
Google Trends
Click here for Google Trends
It is another great tool that allows us to analyze those topics of interest and trends on the Internet based on the main search trends that are carried out on a daily basis on Google.
In addition, it helps you measure the evolution of that niche, or what is the same, how did it behave in the past and how is it expected to behave in the future?
Google and other search engines
This is the best way to check search intent and the types of results offered for the main search terms analyzed with Google Analytics and other competitive analysis tools such as SEMrush.
And it is that nobody knows completely the operation of the Google algorithm, so the best way to draw conclusions in relation to the positioning of certain search terms and the criteria that Google follows for it is to analyze the results it is offering and investigate competition to improve the work they have done for them.
Google Correlate
Click here for Google Correlate
This is the last of the tools that Google offers us to be able to detect and find market niches.
With this tool, you will be able to detect terms related to the search activity carried out by users, with a search term that is fashionable at the time or that has shown a growing search trend in recent months.
This is because the tool displays related terms that are trending very similarly to the one experienced by the target term.
This is very valuable information that can help to detect new market niches, although logically, later the appropriate checks must be carried out to determine that this is the case.
SEMrush
There are also competitor analysis tools like SEMrush.
They are the best way to investigate what other companies in the sector do online and see their specialization and segmentation in order to detect possible market niches to be exploited,
which have not yet been attacked.
Set up a new project
with SEMrush Position Tracking
Enter your domain
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ADS illustration
Reference websites and other formats such as television programs, specialized magazines
Finally, in this type of communication media, you can find a lot of information and ideas about trends and innovation in different sectors that can be of great help to find and detect possible profitable market niches for your business.
For example, magazines/websites like “May Interstate” or television shows like “Impregned” are a source of good ideas.
conclusion
Once you have seen the main tools to detect and discover profitable market niches for your business, I encourage you to search and find the one that can bring you that profitability that you are looking for and that we all crave.
To do this, if you sense that there is a product or service that you can market which is beginning to be sought a lot within your sector, use the appropriate tools and analyze the viability of the project.
