A market niche is a highly specialized type of business intended for a small circle of consumers. It is characterized by a small but constant market capacity and a significant reduction in competition. A market niche may be the result of targeted marketing - a direction to a stable but fairly small part of the market that large businessmen cannot or do not want to pay attention to, and where the competition press is relatively low. The matrix of BCG (Boston Consulting Group) puts forward such a hypothesis that the owner of the largest niche has the highest profitability compared to other market participants, and, accordingly, the maximum income.
- The emergence of a new market niche can be formed due to a special situation on the market - a certain set of circumstances and conditions that give rise to specific requests and unique needs on the part of the consumer that cannot be satisfied with the help of goods or services already available on the market. Since the prosperity of the four main market groups, according to the BCG matrix, does not always happen, the emergence of a new niche may be due to the emerging consumer vacuum.
- A new market niche may be the result of vertical marketing, which is specifically focused on finding a new business, for example, finding ways to sell a unique product with the same product simultaneously on several market segments.
- A new niche may be the result of horizontal marketing designed to search for a horizontal market niche. Such income, as a rule, assumes a regular expansion of services and products, while orienting them to one target segment.
- Spatial or bundle marketing can help identify a new market niche by forming a circle of stable consumers attracted by a full package of services or goods.
Today, only the entrepreneur’s personal qualities, abilities, knowledge, and qualifications can affect the choice of a market segment or one’s own niche. Many successful enterprises that occupy market niches owe much to their management not because it sought to create a completely new product, but because it tried to promote ordinary products in a completely different way. Today, deep specialization is required not only for the development of new production technologies, but also for working with your consumer. That is why many highly developed countries use the latest developments in the sale of services and goods to determine the market niche. The process of determining your own market niche, unfortunately, very often resembles the search for a free vacuum, which must be filled as soon as possible. In essence, market niches are a harmonious tandem between fully recognized and matured needs with non-traditional methods, forms and ways of satisfying them. The main objective of marketing is to determine how to solve the problems the consumer has, because today niches arise in any economic industry, even in long-divided markets.
The highest quality of products and services is considered one of the most important conditions for successful implementation and justification in a market niche. It is worth noting that any company is one hundred percent sure that it is its services and products that represent the highest quality. Nevertheless, in order to focus on market niches, one must be able to sensitively react even to the slightest changes in supply and demand, anticipate future changes in the structure of doing business and apply their unique knowledge to solve a wide variety of issues. For example, today the segmentation of the educational services market is considered the most promising due to the low level of free education.
The BCG matrix today highlights the version that a small market growth does not require additional funding. A similar hypothesis holds, but in some cases it does not work. It is far from always possible to count on a successful venture in a niche market. Many well-known entrepreneurs believe that it is better to buy a business from competitors than to start it from scratch. Targeting a market niche depends on production efficiency, this allows you to reduce the cost of transportation costs and unreasonable advertising. Nevertheless, the search for a market niche is far from being limited only to market analysis, the appropriate organization of the enterprise and experienced specialists capable of establishing narrow-profile production are also a necessary condition for this. As a rule, for large enterprises this is an insurmountable task: all attempts to isolate small firms from their environment come into conflict with the organizational methods of large business. As a result, small flexible narrow-profile companies, merging with large enterprises, begin to lose their true face and lose their competitiveness.
The BCG matrix is an excellent assistant in finding a free niche or market segment, especially in deciding on the market positions that are outlined in the market. Its simplicity and accessibility allows you to make the right choice on the path to the prosperity of your own business.