selecting a niche

One of the biggest arguments that I hear against identifying a niche is “How will we grow and adrress the full market”

First trying to address the “full” market is a fallacy. Its not ever feasible….but we will address it in a separate post.

For this post let’s keep our focus on the niche you have and how to grow it.

We will take 2 examples – one from the low value “eggs” that we had touched earlier and another from the IT services segment which is B2B and ultra high value.

This topic will be carried over multiple posts, because any product management process will need to go through multiple steps to make it successful in the market. The logic will hold whether you are selling financial services or consumer products or technology services

The assumption over here is that you have a ” Market in the niche” . If you are reading my blog posts for the first time, I would suggest you look at my previous posts where I give a detailed explanation on this topic.

The second assumption is that you have a very good product or service and you can differentiate it in the market.

The third assumption is that you have analyzed and seen that there’s what Dan Kennedy used to call a “Hungry Crowd” or a market for your product or service.

So if you are trying to sell eggs in a locality which is predominantly populated by vegetarian people , then however good your product is, you will never be able to grow your business because there are not enough people who eat eggs. So there will hardly be anyone willing to eat a “red” egg ( see my previous post on this red egg example)

With the above 3 assumptions in place, it means you have been able to identify your market, identify the niche in the market and size it.

From the next post we will start looking at making an entry into the market and growing it.

Till next time.

Carpe Diem!!!

Today I will speak about the economics of selecting a niche.

We have already identified multiple advantages of selecting a niche and creating a perception of being different.

Once you have identified the niche the fundamental economic advantage you get is that you don’t have to try to send your message to everyone in the universe. Now your message is only going to a select few who meet the criteria of your ideal customer in the niche. So we have brought in a new term with respect to marketing to your customers – ideal customer.

So a niche could be people who like red eggs. Instead of looking at the whole of the United States to start doing your marketing, you may want to target red egg eaters in Old Town Alexandria, who are in the age group of 55-65 years. You may target this because your poultry farm is in VA so logistically its easier for you to address the market and then because your red eggs have higher protein, people over the age of 55 might be a good market to check.

So now your challenge is to find a way to identify how many of the above age group people live in Old Town Alexandria and how do you reach them.

Obviously you need to look at the other aspect which I had mentioned in my earlier posts. Which is – is there a market in the niche. So if you realize that there are only 200 people who fit your profile then may be it may not be a market for you if your poultry farm is producing 6000 eggs a day while it maybe a worthwhile market if your farm is only producing 20 eggs a day.

So keep this in mind always – you need to identify a niche in the market but you need to also see if there is a market in the niche.

If this market suits you then you now only need to be targeting this specific set of people at a defined frequency in the media of their choice. So instead of doing broad level advertising on radio or tv you could now target a media which is more tuned to this population in Old Town Alexandria.

This way even a very small budget can go a very long way to reach your ideal customer.

Till next time then.

Carpe Diem!!!

ANIMESHJMATHUR

Growing the business in a niche

Selecting a Niche – Part III – the economics