Create your own market where you are the best and only provider.
Don’t assume you have to compete on the same playing field as everyone else. One of the most powerful market strategies is to create a new niche market which targets the specific needs and values of a specialized group of buyers.
A niche market effectively creates a customer base where you are the sole supplier.
The goal here is to slice off a piece of the market and then craft a product or service offering that is uniquely suited to their needs. When mass markets offer a compromise that serves average needs in the overall marketplace a niche offering can almost always do better by tailoring its value proposition.
In the past the high cost of creating a product and reaching the marketplace, constrained the number of niche markets that could be created and economically sustained. Today, efficiencies in every area of design, production and marketing have enabled many more niche services and products.
This is an excellent strategy for breaking into a market or achieving gains in a mature marketplace. Established markets are brutal. Entrenched competitors have advantages of scale, established business relationships, and brand recognition. The opportunities for gains are often incremental and hard fought.
The best way to win the race is to run alone.
The Long Tail offers compelling descriptions of markets that have recently been transformed, moving from a few mega-winners to an army of small niche offerings in the “long tail”.
- What groups of customers are served in this market? What are potential niches?
- For each group, what unique needs and desires could be better served?
- How would you reach the niche with your offering?
- Has anyone else identified this niche? What are they doing? Why does it work/not work?
- What makes the new service compelling to the niche? How much would they care?
- Is there are tradeoff that the Niche would accept, but that would be unacceptable for others?
- Can the idea be tested in the marketplace?