What Is Niche Marketing?

Niche marketing involves creating a product or service and marketing it towards a small section of the population. One example of this is a kosher dairy service in New York City that serves the area's Jewish population.

The art of niche marketing involves filling a gap in the market for a small portion of the population. While large businesses engage in this practice, it is mainly small or medium-sized businesses filling gaps. Market niches can include different ethnicities, geographic areas, specialty industries, different age groups and other unique groups of people.

Although niche markets sometimes cater to small groups, sometimes they serve large demographics and generate competition. The individual offering kosher milk to New York City's Jewish population is an example of a small niche market. In contrast, a corn producer serving the dairy manufacturers that moved into the Pennsylvania area is an example of a large niche market.

Someone who wants to work within a niche market needs to take certain steps:

  1. They should identify the niche they want to work in and its characteristics. This includes marketing research that determines the type of customers, how much it costs to deliver the product and potential obstacles.
  2. It is necessary to determine the business' long-term goals and whether they are compatible with the market.
  3. Determine which resources, labor, capital and skills are available to establish the market. In addition, identify lacking resources and how to fill the gaps.
  4. Develop a marketing and business plan.