Niche In Market

Niche In Market Definition:

A niche in market is a group with a narrow definition (that the market segment). It is usually a small market whose needs are not being well served.

Complementing this definition, niche in market (unlike the market segments that are larger groups and easily identifiable) is a smaller group (of individuals, companies or organizations), with needs and / or specific wishes, willingness and financial capacity to satisfy them for the purchase or acquisition.

Niche In Market Features:

In general, a niche in market has the following characteristics:

• It is the fraction of a market segment, each niche has some peculiarities that distinguish it from other niche or segment as a whole. For example: People who use air transport to travel to a distant place, represent a market segment. Meanwhile, people who fly as well and choose the “business class” represent a “niche market”.

• A small group: It is composed by people, companies or organizations in a reduced amount (as compared to the market segment to which it belongs). For example, the number of executives or people who choose the “business class” on a plane flight is much smaller than the number of people traveling in the “economy class”.

• They have specific needs or desires alike: usually consist of very specific needs or desires, and also have their degree of complexity, therefore, this group is willing to pay “extra” to purchase the product or service that meets its expectations. For example, people who choose the “business class” on flights, have very special requirements, such as: more room to stretch its legs, or padded seats more comfortable, a menu of its choice for food and drinks, more staff qualified in their care, music, video, special pillows, etc …

• There is a willingness to meet their needs or desires, have a “willingness” to purchase a product or service that meets their expectations, and in the case of companies or organizations have the “ability to make purchasing decisions “. For example, people who travel in “Business Class” asking for its passage to that category of travel, even without the staff of the airline suggesting it.

• There is an economic capacity: Each component of the “niche market” has sufficient economic capability that allows them incur the necessary expenses to get their needs or desires satisfied. Even willing to pay an additional amount for a better satisfaction. For example, people who choose the “business class” on any airline, have sufficient economic flow to pay an extra amount for that luxury.

• Requires specialized operations: Since there are needs and desires with specific characteristics and even complex ones, niche market requires specialized suppliers capable of meeting their expectations. For example, customers of “business class” hope they will be  provided with a unique window where you do not have to wait in line, a more comfortable waiting room, qualified staff for their care, special membership cards, etc…

• There are very few or no supplier: In those market niches where the characteristics and complexity of their needs or desires require highly specialized service, it is normal that there are no more than one or two suppliers, may even be that there not at all.

• Is large enough to generate profits: An ideal market niche is one that has the size needed to be profitable.

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