More fail than succeed, for a variety of reasons. Sometimes, the product is brought to the market too soon in its development stage. Other times, its branding is off, leading to a disconnect with consumers.
One of the biggest reasons products or services fail is that the targeted niche markets are the wrong target. Many an entrepreneur has crashed and burned because they didn’t find the right market for their product. While finding a niche is possible for some businesses, what they are really doing is creating their own. Here are some tips for making a niche:
B2B or B2C?
You may already have your product or service in development. You may also have the entrepreneurial bug and want to create a product. Either way, you have to first identify whether you want to be in the umbrella markets of B2B or B2C.
Business to business (B2B) organizations market and sell products to other organizations. An example would be an office furniture store. It sells to organizations like schools, brick-and-mortar businesses, etc.
Business to consumer (B2C) firms, on the other hand, sell directly to consumers. A good B2C example is a local clothing store. It sells directly to people who will wear, or consume, the clothing.
There are businesses that are both B2B and B2C. Think of large-scale office supply stores. Many of these businesses sell to both other B2C organizations and to consumers themselves.
Identify a Gap
Deciding between B2B and B2C is only the beginning. You next have to look at your field and find a gap in how the customers are being served. This focusing on your market is one of the most difficult steps in creating a niche market.
It’s also the most necessary. Just one tiny tweak, and you can differentiate yourself from competitors in a market. If you’re not sure where to start, look directly at your competitors, potential or otherwise. You can learn a lot from the competition, especially about market saturation and differentiation.
Assume your product is very similar to the other maternity clothing stores, but you learn from doing a competitor analysis that the market is full of maternity stores and sites. However, you find there aren’t many producers of maternity workout gear. You have now identified the gap in the larger market.
You’ve found the gap. Now you plug it. That’s how you create your niche in the market. Look at the e-commerce industry. Within the industry, there are many sites that are not only well-designed but each offers business to a different niche.
Ticket marketplaces are one market that always breeds niche innovation. Some have created niches in the sports gambling market, others in community events, small and large. Instead of creating carbon copies of other ticketing sites, the most innovative ones have plugged a hole in the wall of need.
Thus they have their target markets: events planners, sports fans who either hate it when the home team loses or deep-dive into statistics to buy tickets to a game they’re likely to get refunded. As companies develop their products, more niche markets will reveal themselves, sometimes changing everything.
Whatever niche you decide to create, will help you spend your marketing budget wisely. It might also lead to more product development opportunities for your organizations, as gaps again start showing. Don’t go find a niche. Start making it now.
Hattie is a writer and researcher living in Boise, Idaho. She has a varied background, including education and sports journalism. She is a former electronic content manager and analyst for a government agency. She recently completed her MBA and enjoys local ciders.