Niche Markets and Entry Barriers
There is a general understanding that the niche market is the entrepreneur’s friend. You find one, you occupy it, you move quickly to dominate it, and bingo, you might just have a long-term success on your hands.
Yes, it does happen. But there is a tendency to treat the niche market as an absolute, which it is not, and to engage in a bit of euphoric oversimplification.
So what is a niche market? Well, commonly accepted features include:
- The niche is a subset of a more general market; for example, we all buy groceries (mass market) but only a few of us do our grocery shopping at Fortnum & Mason in Piccadilly (niche market).
- The niche market is usually narrowly defined, in terms of both buyer characteristics and product/service features; US surf boarders discussed in Chapter 4 might be an example.
- The putative niche market is reachable; undercover agents in foreign (to them) countries suffer fear and stress and would benefit greatly from an ‘in the field’ dedicated counselling service, but these potential customers are not reachable and are not grouped – a niche manqué!
- No mainline provider is catering for this niche, with the implication that the mainline providers have crassly ignored it. So it is there waiting to be discovered by the resourceful entrepreneur. To which might be added that textbooks tend to take their examples from high-end consumer goods industries – Porsches and Rolex watches and so on. This is fine in the sense that ...