When you make a web search in your favorite search engine, nine out of ten times, you don’t go to the second page. So it’s the first ten results that matter and rest are ignored. Same way the human brain works. There’s a list of top choices for everything and we normally ignore the others. So here’s the question: do you want to be the top choice for something, or mediocre for everything? I believe in today’s world, to be a specialist in something is what matters, which endorses that niche is indeed the way to go.
Targeting a niche market is important also due to the fact that one size doesn’t fit all, be it individual or industry. Consider something like developing Enterprise Resource Planning software. There are several minute details in every industry and to make sure you are optimizing resources for a company in that industry, you need to know those details inside-out. So I believe the best way to sell ERP solutions is to target an industry, master the economics of that industry and mold your software to take those details in consideration and make your solution attractive, and the primary choice, for companies in that industry. Such an ERP solution will definitely appeal more to companies in that industry as compared to generic ERP solutions.
In certain consumer products, companies make a mistake by directly going for the mass market ignoring any niche to which the product might have a special appeal. This process is often more expensive and doesn’t work for most companies, with exception of a few with really deep pockets. I believe a better approach is the one taken by companies like Apple and Whole Foods. These companies market their products to a small niche, to people who consider themselves member of these company’s cult, and then expand their reach to the masses. In the process, they generate support from a group of mavens who add to the company’s capacity to target a bigger and broader market in the long run.
6 responses so far ↓
Bundling: it’s solutions to problems « Adscovery // April 17, 2008 at 6:23 am |
[...] idea is to target the niche by putting products together and adding bells-and-whistles to them, essentially creating a bundle [...]
The search engine effect « Adscovery // May 19, 2008 at 6:43 am |
[...] top ten results for something and the best way to do this for any new player is by targeting the niche. Pick a niche, solve a particular problem in the best possible way, be the first choice for anyone [...]
What’s your Customer Magnet? « Adscovery // June 16, 2008 at 5:29 pm |
[...] you got to have a customer magnet to be successful? I am a die-hard advocate of serving the niche, so I believe yes. You got to start from somewhere. Get hold of one thing and do it in the best [...]
Few vs. Many « Adscovery // August 4, 2008 at 6:11 am |
[...] than a supplier-buyer relationship. Second, word of mouth marketing. When you are serving a niche and large amounts are at stake, referrals make all the difference. Third, brand equity. This is as [...]
You must be designers « Adscovery // August 29, 2008 at 11:58 pm |
[...] is a typical case of targeting the niche, and Apple does it with ultimate perfection. Like any other niche marketing effort, Apple as well [...]
The primary customer « Adscovery // October 24, 2008 at 2:48 am |
[...] point to note here is, you must know your primary customer base and serve it. I believe having a niche as the primary customer base to start with will increase your chances of being successful. Reason [...]