How niche marketing can benefit your business

Niche marketing is a form of business marketing that focuses promotion of product(s) or service(s) on a specific target market. Since it 'targets' a specific portion of a population demographic niche marketing is an arguably more effective way of generating revenue than mass marketing. This is so as the products or services may be more likely to be purchased by the target market because in a sense the products or services are customized for them.

Niche marketing using Earth friendly branding

Source: 'Ecogirls'; C.C. By-S.A. 3.0

The reason niche marketing is used is because it is a cost effective form of advertising. Rather than spending endless amounts of money to drag a marketing dragnet across a sea of people it is considered beneficial to identify that group or those groups of people who are most likely to use a certain type of product or service. After this group is identified a niche marketing campaign can begin.

Defining niche marketing

To illustrate what niche marketing is think of a specific type of product like writing services. People who like to read a lot are probably more likely to enjoy writing than those who prefer talking a lot. Markets can be divided further through complementary products. For example, if someone is already subscribing to a writing magazine, they then become a more likely candidate for a writing website than someone who doesn't subscribe to the magazine. At least that's how some marketing logic works. This group of people subscribing to the writing magazine then become a potential niche demographic for additional writing services, and marketing of those services is then considered 'targeted'.

Benefits of niche marketing

The benefits of niche marketing including a more researched study of who is likely to purchase a product in addition to potential advertising savings and increased sales per advertising dollar. So long as the research costs don't outweigh the decrease in advertising dollars the decision to establish a niche market is well founded. Acquiring a niche market involves more than just finding magazine subscription lists however.

A niche market is also found through other means such as website visits, personality type, income demographic, religion, socio-economic status and culture. There are many ways to identify who is going to buy what and this is assisted by the use of statistical tools such as cluster plots, and mean regression analysis. When various groups of people demonstrably fall in to certain groups, this is illustrated through statistical charting and graphing. This research is then used in obtaining marketing financing from finance executives. Additionally, when the results of primary research such as surveys and focus groups leads to probable success of a nice marketing campaign such financing is further justified.

• Potentially increased sales per dollar of advertising
• Higher corporate profit
• Better researched consumer profile
• Product or service viability and usefulness defined in terms of consumer
• Increase marketing efficiency

Summary

Niche marketing is thus a form of marketing that matches a certain brand with a person or group of people. While this is ideally intended to lower advertising costs and increases profit from revenue and the sales per advertising dollar ratio. This beneficial affect of niche marketing may not always happen as the 'market' is composed of human variables and is thus an inherently adverse enterprise. Nevertheless, in addition to enhanced demographic identification which stabilizes market forecasting are ideas like brand equity that are used in collaboration with the targeted marketing. This brand equity can also improve the perceived value of the product or service to a client and theoretically increases the likely-hood of product or service patronage.

Source: http://www.businessdictionary.com/definition/niche-marketing.html