Sometimes a seemingly obvious target market is not the most lucrative for a new product or service line.  This can be especially true for start-up enterprises attempting to break into established market places.

Identifying a tightly defined niche within a broader market can allow a new company to develop competitive advantages by tailoring features and benefits that can’t be emphasized by businesses that sell to wider audiences. A focus on non-traditional or under-served needs can ease entry into the marketplace and help develop a foundation for later expansion of a customer base.

Even experienced companies can improve the chances of success for new products or services by targeting unconventional niches.  In fact, mature businesses often possess more resources and data that can be used to help them identify potential niches.

Target Rich Resources

Existing customer lists may include candidates for newly developed lines who are not being served effectively by older technologies or methodologies.  These customers and their needs can be identified through surveys, reviews of service records, and/or feedback from the sales personnel who interact with them.  Such analysis of those customers and their requirements can either locate niche markets after new products or services are acquired or it can provide direction for developing new lines.

New companies can find entry niches by conducting competitive intelligence, surveying potential customers, or simply by “thinking outside of the box”.  Competitive intelligence involves researching businesses already operating within a broad market and identifying their marketing focus, service areas and well-known customers.  Surveying prospective customers can provide new companies with similar information available to established businesses that analyze their existing customers.

Start-up Strategies

Both of the aforementioned methods may be too costly for new enterprises, however.  For start-up operations “thinking outside of the box” can often deliver excellent results when thorough and patient research and observation are implemented.  Brainstorming sessions that include people who have studied the market or have some connection to it can result in unconventional ideas that will discern unique opportunities.

This marketing strategy can also allow companies to charge a premium for their goods or services because needs are addressed that were never before understood or emphasized.  Thus, even businesses operating within commoditized marketplaces can and should search for niche markets that can provide higher profit opportunities.

Related columns:  Low Hanging Fruit

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