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The Ignored Segment: Niche Marketing
by Scott F. Geld
http://www.marketingblaster.com

Niche is a market segment that is narrowly defined. It is a
small market whose needs are not well served in the normal
course. Marketers usually identify niches by dividing a
market segment into sub-segments or by defining a group
seeking a distinctive mix of benefits.

Segments are fairly large and attract several competitors;
niches are comparatively much smaller and attract just one
or two. Larger companies many times lose pieces of their
market share to smaller niche players. Sometimes the larger
companies turn to niche marketing, which has required more
decentralization and some changes in the way in which they
do business.

The importance of niche marketing is evident in the media.
For example, there are dozens of magazines that are
targeted to different sections and subsections of the
market: brides,basketball fans, teens and so on. Magazines
are also broken down into subsections according to gender,
ethnicity and sexual orientation.

Niche marketers presumably understand their customers~
needs so well that the customers are willing to pay a
premium. An attractive niche is characterized as follows:
customers in the niche have a distinct set of needs, they
will pay premium to a company that best satisfies their
needs, the niche is not likely to attract other
competitors: the nicher gains certain economies through
specialization, and the niche has size, profit and growth
potential.

The great news about niche marketing is how cost effective
it can ultimately be and the fact that it is really not
much of a risk to invest in a niche market especially if
the benefits a company promises meet the niche~s particular
needs. The company must ask itself: what new and exciting
product can we offer this niche market? In order to answer
this question, it must examine the specific needs of the
market and find new ways to ensure its product or service
meets those needs.

Another great advantage of niche marketing is the relative
lost cost a marketer incurs. Further, marketing a new
niche can be a low-risk way to expand business, considering
there is a special appeal to the niche market. The company
must ask: what can be provided to the consumer that is both
new and compelling? In order to answer this question, the
company or marketer must determine the specific needs of
the audience and find a unique way to meet those needs. Of
course, in order to break into a niche market, the marketer
must also fit in that market. That is, he must understand
and speak their language and talk to them as though he is
one of the group. He must also know and understand the
~hot buttons~ for the group. Speaking to the niche group
may also require some adjustments to a marketing campaign,
including the company slogan or even name, particularly if
the name doesn~t work when it is translated into another
language.

Once the marketer understands his market, he needs to check
out the competition. If there are competitors, in what way
can the marketer outsell them? The marketer is going to
study the competitors~ website, advertisements and
brochures and note the selling points, pricing, delivery
method and other factors.

However, there might not be competition. What happens if
this is the case? Having no competition could be a good
thing, but it could also be a bad thing. Perhaps no company
has attempted to break into this niche market. Or, maybe
other companies have tried and simply failed. Whatever the
case, marketers want to conduct tests to determine whether
the niche market is willing to receive its product or
service. Proceeding with caution is the best advice instead
of jumping head first into the niche market.

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