5 Steps To Niche Marketing

Niche is defined as a subset of market on which a specific product is focused. Niche marketing focuses on that subset of market which is either underserved or is overpriced. Niche marketing aims to develop an alternative product or service that caters to unserved need of market. The more granularly you define a target market, better chance you stand to unearth a Niche. It is like digging an Inch-Wide and Mile-Deep.

Both market incumbents and newbies can develop a niche market. While at one extreme a retail behemoth like Walmart has created a Niche by offering ‘Lowest Price of the Day’ to its bargain-minded shoppers; at the other extreme a healthcare aggregator startup company called Lybrate has developed a platform to connect doctors to patients via their online platform.

While creating a niche in your business, the 2 most important criteria to assess are target market dynamics and your product’s attributes. So let us see how to go about developing a Niche product or service. Essentially, there are 5 critical steps to develop a niche.

1.   Know your market. Who am I selling to?

The first step to creating a niche is buyer personification. Can you distinctly paint a picture in your mind about your ideal customer? Who is your customer? What’s her age? Is she self-employed or a dependent?; How big is her family? Where does she live? What is her social circle like? How conscience is she about health of her family? How much does she spend a month on her family’s health?

Create your Buyer’s Persona

‘Meet Mrs. Kalki Sharma. She is 35 years of age, married, self-employed woman with 2 kids studying in 4^th and 6^th grade at the nearby school. Her husband works with an IT company at a mid-level position. They live together with Kalki’s in-laws in an up-market city center. Kalki is very conscious about her family’s health and has taken a health insurance for all the members of the family. She is very well connected on social media and likes her evening strolls with their neighbors. Most of their health spends are in buying medicines for her in-laws from nearly pharmacy shop and rare visits to hospital for general check-ups’

Well, there you go. Here is your Buyer’s Persona. Buyer’s persona must resonate well with your average customers.

You may ask, how did creating a Buyer’s persona help me in creating a niche? The answer to that is that by defining the Buyer’s persona, you lend a laser-guided focus on who and what to sell. Bottom line is not to be everything to everyone, especially so if you are a young company, a startup.

Just segmentation is not enough to create a Niche

Although the market segmentation is very essential to create a niche, it is not enough. It is not enough to know just the basics – age, income status, marital status etc. Niche marketing requires a more granular look at the business and the evolving market trends. You need to dice the market segments further to create “micro markets” and then redeploy resources (manpower, sales reps, marketing budgets etc.) to cater to specific demands of a micro market.

A successful Niche marketing strategy always has micro market at the core of its execution. And micro market needn’t be a physical region; it can even be a service offering. Creating a product-oriented micro market helps to separate wheat-from-the-chaff and create a distinct value offering.

For instance, Columbia Asia Hospital’s Integrated Digestive, Liver and Cancer Care (IDLCC) Program is a good example of a Niche product. The program with its unique integrated care approach has enforced a distinctive apple-to-orange comparison in the minds of prospective patients thereby creating a Niche offer.

Regardless of whether you aspire to be a Bloomingdales (premium fashion brand) or a Myntra (affordable fashion brand), a Bumrungrad Hospital (Thailand’s tertiary care hospital) or Aravind Eye Hospital in India delivering free healthcare to poor, you must identify a well-defined market to sell a well-endowed product.

This takes us to the next step in creating a Niche, your Product.

2. Unpeel benefits. What am I selling?

To create a Niche needs a focused market and product driven approach and to sustain a Niche requires a laser-guided focus on unearthing and inventing sellable features. These features not necessarily have to be in the product itself. Instead, they could be the way the product is designed, produced, marketed, distributed, packaged or even serviced. That means a marketer can create a Niche across its Distinctive Value Chain.

When it comes to the product-side while creating a niche, the adage that fits perfectly is that ‘God lies in details’

You must identify the hidden inner benefits of your product, an offering that is distinct and provides solution to customer’s unresolved problems. A solution that forces an apple-to-orange comparison and helps you create a USP for your offering. That is a true service Niche.

What do I have that other’s don’t?

For you to create a niche, you must have a granular level understanding of your customer’s problems and how your product can address their problem. You should probe about:

• The over-arching pain points of my prospective buyer
• Why is the pain not addressed yet? Is the solution probable? Is the solution cost-effective? Is there a solution at all?
• Would my product’s offering cater to unmet needs of a customer?
• Would my customers be willing to pay a premium price for my product that serves their unmet needs?

While keeping your product at the core, if you have favorable answers to the above questions, then you have a probable unearthed goldmine at hand!

3.   Positioning is key to Niche Marketing

Would a product survive if it does not have anything unique value to offer? Definitely not for long. But neither would it survive having a value offering unless it is positioned well in the market. Value proposition by itself would not raise sale quotient of a product.

So how to market a unique value proposition? The answer lies in Positioning

Unique Value Proposition + Market Positioning = Unique Selling Proposition

Positioning forces marketer to look at a product from customer’s eye. Cornerstone of a successful niche marketing strategy is to Think Of Customers First. Everything gyrates around how to satisfy customer’s unmet needs at relatively lower cost while charging relatively higher price for a reasonably long term by creating a sustained competitive advantage.

Example of Niche positioning by Aravind Eye Hospital

A very apt example of carving a niche based on positioning is Aravind Eye Hospital, founded in 1979 by retired army surgeon- Dr. G. Venkataswamy. Aravind Eye Hospital has a distinction of being largest provider of eye care in the world, performing about 300,000 surgeries a year, at least two-thirds of them for free. Aravind Eye Hospital has achieved this by carving a unique niche from the existing market segment and positioning itself as a viable substitute to cater to under-served needs of customers (patients who could not afford eye care).

Positioning grid – Aravind Eye Hospital’s Niche (Cross-subsidized care)

Aravind Eye Hospital’s target segment (self-pay, low-price customers) is defined by its unique value proposition to provide affordable top-class eye treatment to poor patients without compromising on quality of care. What makes this feat more remarkable for Aravind Eye Hospital is that most patients are self-pay and it does not get any grant from the government.

The hospital cross subsidized free surgeries to the poor by offering top-of-the-line, internationally benchmarked eye care, attention and comfort to its affluent customers. The hospital has managed to create a niche by positioning itself differently amongst its different demographics, viz., poor and affluent class patients. Same set of clinicians provide care to both demographic segments at Aravind Eye Hospital. However, the care given to poor is bared down to basic essentials with no-frills whereas affluent patients are given customized supportive care with special attention throughout their treatment.

Niche Positioning lends customer focus and direction to a marketing strategy. It enhances product’s unique value proposition in minds of target audiences to make it sale worthy.

4.   Dig deep

Ok, so you have niche offering that is positioned uniquely. What next? How do you make the niche stand out from clutter?

The next step in marketing your Niche is to make your benefits so compelling, desirable and hard-to-resist that it is a no-brainer for customer to reach their wallet and hand over cash to buy. But it is not that easy, right! So how do we go about it.

Tide away from promoting ‘me-too’ benefits. Apple-to-apple comparison is a death knell for developing a Niche. It forces marketers to end up in a price-logjam with the customer from where it is always zero-sum game.

Imitation is the worst enemy of Niche marketing. As Magretta Joan says in her book Understanding Michael Porter: The Essential Guide to Competition and Strategy, “Competing to be the best feeds on imitation. Competing to be unique thrives on innovation”.

Force ‘Orange to Apple’ comparison

Niche marketers should aim at unpeeling hidden benefits of their offering and make benefits stand out from competitors. Bring out a distinctive value proposition that compels customers to prefer your Oranges from competitor’s Apples provided that your marketing is not just a fluff and your Oranges – distinctive value proposition of your offering- is truly better than Apples -competitor’s offer.

And this distinction does not necessarily have to be in product itself. It could be anywhere in the product’s value chain be it at product design stage like Omada Health’s Online diabetes prevention program that inspires patient’s behavior to achieve weight loss; at production and assembly line stage as in case of Harbor-UCLA Hospital using Toyota’s Lean management; during packaging stage; at the time of delivery and distribution like Nightingales’ Home Healthcare Services, or even during after-care through smart cards that store digitized patient records.

A classic example in healthcare of an offering with a distinctive value proposition is IBM Watson Health, an IBM cognitive learning program that predicts medical treatment outcomes. Also read here how a leading private hospital in India has adapted IBM Watson for treating oncology patients. This distinctive proposition can be marketed as a Niche.

5.   Go viral

A product is as good as it sells.

A marketer must develop that sweet-spot for your product with your Buyer Personas otherwise all bells and whistles would mean nothing. The eventual force-multiplier for your product’s sales is post launch marketing, social media and distribution channels.

It is imperative to assess strengths of marketing channel in relation to your business before you decide on marketing your Niche. Is it the mass-reach of traditional media like Television, Radio or Print media that you want to leverage or you want to bank on social media that offers granularity, precision and ROI of a Twitter or Facebook Ads.

Niche vs traditional marketing

Niche marketing is not like a colloquial run-of-the-mill marketing. It is highly targeted, segmented and granular. And that makes it challenging. A scattershot or spray and pray approach to marketing is a far cry when it comes to marketing a Niche.

Marketing to your target segment at a granular level works perfectly in case of Niches. Niche product is inherently not meant to serve needs of everyone. So why waste dollars in marketing to all? Alternately targeted social media campaigns are perfect for promoting a niche. It ensures you have a tighter control on your marketing spends, the monitoring is effective and course correction can be done nimbly.

Summing up…

Finally it comes to delivering your promises. Whether have you delivered promises made to your customer? Is the customer satisfied with your value offering? Have you stood guard for your customers’ after sale? If yes, then the customer would affirm her loyalty towards your offer and become a brand advocate and propagator of your Niche.

Niche marketing is really about FOCUS on your target segment. It is about knowing who your buyers are and aligning your product’s features to cater to unmet needs. It is about treading un-treaded waters, creating a blue-ocean market based on value innovation and making the competition irrelevant.

So there you have it- 5 Steps To Niche Marketing.

Do you agree with me on this? Or you feel I have missed the bus! Either way, I’d love to hear your thoughts on the topic. Please share this post with your friends and leave comment.

Happy thoughts!