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Creating a suitable market and positioning yourself as a suitable brand for a specific target audience not only establishes your credibility compared to competing manufacturers, but also leads to more focused business operations and sustainable development.
1. What is a niche market?
A niche market is a term used to refer to a segment of a larger market that is identified and studied specifically based on the needs, preferences, or unique characteristics of customers to form a market. This customer segment helps businesses focus their products more accurately on customer needs.
For example, the fashion market is vast, but there are niche markets for student fashion, office fashion, etc. and each with different system requirements depending on customer needs.
2. The importance of niche markets
Niche markets play a very important role for all businesses, especially for newly established companies and startups. For them, grasping the niche market is the key to success and strong competition against competitors.
The niche market strategy requires the application of market research methods, identifying the characteristics of the target customers, and exploiting gaps in the market to create new demand for their products or services. Niche market strategies must be flexible, constantly changing, and developing. Niche market strategy brings many benefits, including:
Building a good relationship between the brand and customers.
Reducing competition by having a niche market for your product.
Increasing visibility/reach with high personalization.
Increasing brand awareness, emphasizing a strong brand presence.
3. Steps to identify potential niche markets
Understanding the features of your product is the most important thing. Then find customers through the appropriate niche market for your product or service. Compare the niche market and the product to improve features, prices, and implement appropriate promotional strategies. You can identify the niche market through the following steps:
3.1. Identify your strengths and interests
The first step in conquering a niche market is to identify the field that you are truly passionate about and believe in. When you truly love and believe in the field you choose, you can easily create products, services with true value and meet the needs of customers. To succeed in the niche market, it's important to identify your strengths, skills, and standout qualities. Turn these strengths into competitive advantages, helping you create a difference from competitors. Ask yourself the following questions:
Who is your target audience?
What are your standout skills and capabilities?
What problems can you solve for customers?
What are the strengths of your brand?
What expertise do you have in which field?
Answering these questions will help you understand your goals and direction better, thus building an effective niche market strategy.
3.2. Research your niche market
Next, after you have identified your target field, the next step is to research who your target market is. Start with a broad group of consumers and then gradually narrow down the suitable market for you. To do this, you need to conduct a customer persona study, understand their personality, and factors influencing their buying behavior.
It is important to understand customer buying behavior, preferences, and the challenges they are facing. Understanding these will help you identify how your product or service can meet the needs and desires of your target customers.
Once you have a deep understanding of your target market, you can create more effective marketing and advertising strategies, as well as develop products and services that align with their needs.
3.3. Analyze competitors
This is a very important step in building a sales strategy because studying the market and analyzing competitors helps you know the weaknesses and strengths of competitors. From there, minimize risks and effectively direct when identifying a new niche market that you want to penetrate.
If you do not thoroughly research your competitors, it will lead to a waste of resources, costs, and complete failure in the project implementation process. Therefore, you need to complete a competitive analysis to accurately determine how you will stand out among the crowd.
3.4. Choose the right product for the market
Once you have identified your target niche market, the next important step is to choose the right product. This decision not only affects your ability to meet customer needs but also directly impacts the development strategy of the business. Remember the following criteria when choosing a product for the niche market:
- Practical solutions for customer needs: Understanding the needs and desires of the target customer is the key to building a product with true value. Put yourself in the shoes of customers, identify the problems they are facing, and seek useful solutions.
- USP - Unique Selling Proposition: USP is the key factor that makes your product different and more competitive than competitors. USP is the unique strength that only your product has, bringing added value to customers. Identifying an effective USP will help you attract and retain customers, creating a strong competitive advantage in the niche market.
- Evaluate development potential: Before launching a product to the market, make sure the business has enough resources to develop and market the product effectively. Assess financial capabilities, human resources, infrastructure, and other resources to ensure a smooth development process. Thorough preparation will help you minimize risks and increase the chance of success when entering the target niche market.
3.5. Analyze and evaluate profit potential
Evaluating profit potential is a crucial step in any project or business strategy. To ensure long-term sustainability and success, you need to consider the following factors after evaluating the niche market:
- Market potential: Consider whether your niche market has enough size and potential for development. Do the solutions you provide meet the basic needs of consumers?
- Level of necessity: Is the product or service you provide an essential part of consumers' daily lives? Does it bring real value and utility to them?
- Reusability: You need to consider whether your product or service can generate repeat purchases from customers. Is it a product that they will come back to buy again?
- Business sustainability: Despite the opportunities for quick profits, you also need to consider the sustainability of the business idea. Whether your product or service can exist and grow over the long term?
- Avoid hot trend: Avoid investing too much in ideas or trends that are just passing fads. Instead, focus on building a sustainable business model based on the real needs of the market and the value of the product.
Thoroughly evaluating profit potential will help you identify the potential and risks of the business idea, thereby making the right and suitable decisions for the development of the business.
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