carving a niche for your products and services

CARVING A NICHE FOR YOUR

PRODUCTS AND SERVICES

Objectives

■ Understand what niche marketing entails

■ Appreciate the need to create a niche as a business

■ Outline factors to consider in carving a niche for your business

■ Identify how to choose a niche for your business

■ Outline two main approaches to marketing to your niche audience

■ Determine niche market entry strategies for your business

Content

■ Introduction to Niche Marketing

■ Carving a Niche

■ Marketing to your Niche Audience

■ Entering your Niche Market - Strategies

INTRODUCTION TO NICHE MARKETING

Session 1

Introduction

■ Your company is not the only one offering a product or service like yours.

– There are numerous financial institutions in Ghana – banks,

microfinance institutions, savings and loans companies etc.

– In fact as at April 2016 there were 140 licensed rural and community banks in Ghana

– They all have various financial products and services, even

some are exactly like what you offer

– All these institutions are chasing after the same customers

Introduction

■ These customers are being bombarded with marketing messages every day and they are confused as to who they should do business with

HOW DO YOU SET YOUR SELF APART FROM YOUR COMPET IT ION?

Introduction

■ A common thought shared among small business owners is if they offer more products/services, they’ll get more customers as a result. While this makes sense, having a business niche can actually boost business more than offering a wide range of products.

■ It may not make sense to everyone, but providing knowledge about a small set of products/services to a defined market

will help businesses be known for that “thing.”

■ When people know these businesses for this “thing,” they will instantly become the “choice” for their niche

Introduction

■ It’s better for your business to be the first choice of some rather than the second choice of all. You need to identify what you’re really good at, throw your weight behind it, and dominate that one area above all else.

Introduction

■ One of the ways is by choosing a . A niche will help you

break through all the competition so you can survive in the business environment

So what is a niche?

■ A niche or niche market is

– a specific area in your target audience where you will position yourself as the expert

– a segment within your target market where you spend the most time marketing your product or service.

– a specialized market in which a clearly defined range of product is sold to a specific group of customers

■ Your niche helps set you apart from your competition.

So what is a niche

■ Giraffes and zebras both feed on vegetation and yet they do not compete while the zebra grazes grass, the giraffe collects tree top leaves.

■ They both specialize in certain areas and have their own niche.

Niche marketing

■ Niche marketing is therefore a form of marketing that is geared toward a very specific population, or niche.

■ A business may form a niche market strategy around

– its specialization in a particular service, or

– serve a particular demographic group within its target audience.

■ If the business forms its marketing endeavors around this subgroup, this business would be in the practice of niche marketing.

Example 1: Fashion Industry

■ General Term: Clothes design and sewing

– Competition: 167,000,000 businesses

■ Specific Term: Women’s clothes design and sewing


■ Specific Location: Women’s clothes design and sewing in Kumasi


■ Niche: Women’s bridal clothes design and sewing


Example 2: Financial services sector

■ General Term: Financial services

– Competition: 600 businesses

■ Specific Location: Providing financial services in rural areas


■ Specific Term: Providing financial services to small and micro businesses in rural areas


■ Niche: Providing financial services to women entrepreneurs (owners of small and micro businesses) in rural areas


Niche bank

■ A niche bank is therefore

– a specialized bank which deals only with certain types of customers or services

– A bank that caters to and serves the needs of a certain demographic segment of the population.

■ Niche banks typically target a specific market or type of customer, and tailor a bank's advertising, product mix and operations to this target market's preferences. (Investopedia)

A niche is about…

■ Positioning.

■ A niche will help you position yourself within the target

audience you have chosen and will allow you to compete more effectively for their business.

■ Choosing a niche allows you to focus on a specific piece of the target audience and make it your own. And this is the best way to compete against your competition.

■ Small businesses have a definite advantage in niche marketing. Small business can survive; in fact thrive, in niches too small for big business to take seriously.

A niche is about…

■ Expertise

■ To carve out a niche in a specific sector, you need to specialize and be an expert in what you do

■ You need to know your target audience extremely well such that there are no mistakes when you design products and services for them

A niche is about…

■ Being different and standing out from the crowd

– You can not afford to do what everyone else is doing, you need to stand out from among the pack if you want to carve a

niche for yourself. You need to be clearly noticeable so your target audience can identify you.

Why create a niche

Niche Marketing

Reduced Competition

Increased Visibility

Word of Mouth Growth

Honed Expertise

Enhanced Customer

Relationships

CARVING A NICHE Session 2

Factors to consider in carving a niche

■ How does one carve a niche that already has a lot of players?

– There are various factors that go into determining how to position oneself in the market and in what specific sub area

of your market to carve a niche for yourself.

– Lets look at some of them

Pricing

■ You may decide to create a niche using a pricing strategy. So you either

– Price your products or services at a premium.

■ The rationale behind this is that customers are often willing to pay

extra to work with a business that is reputable.

– Price your service very low

■ To attract price conscious customers. Most new entrants use this

strategy although it is not sustainable and will only work if you intend

to gradually raise prices and be profitable in the long-term.

– the best way to go about this is by selling your product at the same price as your competitors and by bringing it down through discounts.

Niche positioning ■ The first step in niche positioning is to identify a negative

‘stereotype’ that exists among businesses in the segment and then offer your product as an alternative that solves this problem

– This is a strategy that can be applied to any industry

Eg. Within the fast food segment of the food industry, a company

may decide to position itself as a preferred choice for health

conscious consumers. So it focuses on using vegetable based

proteins such as soy, beans etc. for its dishes, provides only grilled

foods, no fried chicken or rice etc.

Eg. Unique Bank, Ghana before becoming a bank, focused on

providing loans in 48 hours as a solution to the long delay in

processing of loans by the conventional banks

■ The company captured a certain niche in the market place

Niche audience ■ Businesses can still carve a niche by targeting a specific

category of customers. The objective of this strategy is to focus all your marketing and product building effort on catering to one specific category of people.

– Eg. Women, students, children, professionals, geographical area, community etc.

– Eg. The social network Facebook focused on catering to university students who needed a private community of their own, while LinkedIn focused on professional networking among business customers.

■ Today, both of these social networks continue to exist and they have distinct customers and uses although there is sometimes an overlap between the users of these platforms.

Value added offering

■ What do you do if you offer a mainstream product or service where carving your own niche or audience seems unrealistic?

■ In such cases, one wonderful way to penetrate the market is

by creating value-added offerings that your competitors do not provide.

– Value additions include home delivery (where none exist), free consultations and complementary products.

– The idea is to enhance the value of your product or service and thereby create an unfair advantage to you over your competitors.

– Eg. Buy one get one free offerings, discounts etc.

How to choose a niche

■ Rules of niche marketing

– Don’t aim at a general market

Focus on a sub segment of your market

Eg. If you operate in the beverage sector, do you want to focus on

alcoholic or non alcoholic beverages? If non alcoholic, do you want

to focus on food beverages such as Milo, Horlicks, etc. or pure

drinks? If purely drinks, do you want to focus on fizzy drinks such as

coke, sprite etc. or fruit juices? Etc.

■ In other words, position your brand as narrowly as is economically possible.


■ Beat your competition by identifying untapped niches

– There are a lot of untapped opportunities in our sectors if only we look hard enough and are prepared to work with our

target audience to identify new niches

– Rapidly work with the target niche to co-innovate and reap first-mover advantage by identifying a niche of opportunity

What are some of the untapped niches in the financial

sector?


■ Offer more specific, valuable information to a more targeted audience which is more likely to convert and become customers

– Understand your niche audience and give them what they need

– Become the specialist that anticipates the needs of your target


■ Remember, your niche should be:

– Unique: A niche market needs to have defining traits that separate it from larger audiences and make it easier to

target.

– Identifiable: You should be able to easily describe your niche using details like demographics, behaviours, and interests.

– Scalable: Although your niche might represent a very specific

subset of a market, you need to make sure that you’ll be able to expand on it in the future to reach larger audiences that may currently fall outside of your niche.

What to do when choosing a niche

■ Determine the profitability of the niche. Many niches within your target audience may not provide a decent return on your marketing investment.

– Just because no one is marketing to that niche, doesn’t mean that it is a worthwhile target. That is why you need to do your due diligence. How do you determine if that niche will be profitable?

Conduct

customer

surveys to

understand

them and their

needs

Assess the

competition

within the

niche

Identify your

niche

audience

Also helps you

determine if a real

market exists and if

the numbers are

encouraging


■ Test your product for acceptance within that niche. The niche may exist, but does your product or service meet their needs or is there even a desire for the product?

Carry out

product

/service

sampling

Understand

your niche

audience Repackage

your products

and services

to suit their

needs


■ Embark on innovative marketing.

– It is easy to just assume that once you identify a nice you can go on and market yourself to them using the same old methods and tactics

– Spend the time to determine the best way market to them. Just like choosing your target audience, defining a niche in that audience allows you to target and personalize your marketing efforts.

– So try something new, something eye catching which has not been done yet in your niche area

Remember there’s nothing new under the sun, if you look hard enough, you’ll find something different to try

Essential factors of niche marketing

1. Understand the customers need.

2. Try to know the aims and objectives that the business wants to

achieve

3. Develop promotional materials to the targeted segment at the motivation and interest of the consumer segment.

4. Target the best prospects who most likely can convert to customers.

Group Activity: Defining a niche for your bank

■ The purpose of this activity is to help you identify a

niche for your bank or, at the very minimum, help

you generate ideas on what new areas you can

focus on in terms of products, services or markets.

1. Read Sheet 1: Three Tips to Choosing a Niche for

your Bank

– What ideas can you pick from it to develop a niche

for your bank?

Group Activity: Defining a niche for the bank

2. Defining your niche

– Assess your strengths as a bank

Write 5 strengths

– Assess your client base

What categories of people are they mainly? Individuals, Businesses, Men, Women?

Which category of clients is the most profitable to the bank in terms of volume of business and figures?

What specific services or products can be developed for each category?

Group Activity: Defining a niche for the bank

– Assess your market/industry

What new products and services are evolving in the banking industry

How can you adapt them to the environment in which you

operate and to any of your client base

– Assess your competition

What innovative products and services have they introduced

Is it possible to tweak some to suit our environment and clientele?

MARKETING TO YOUR NICHE AUDIENCE

Session 3

Who is your niche audience?

Your niche audience is your target market.

The group of customers you intend to sell

your product/service to.

It is important to clearly define this group

since they play a large role in determining

your success or failure in your new niche

Who is your niche audience?

■ Some factors to help you define your niche audience

– The age group – is the product/service targeted at teenagers, university students, middle aged or old people. Sometimes there is

a possibility that the product will cater to the needs of all age groups.

– Gender.

– Marital status

– Occupation

– Ethnic background,

– Health status,

– Income status,

– Education,

– Hobbies, etc

Marketing to the niche

■ We will discuss two ways in which you can market to your niche audience

1. Targeting your marketing efforts so as to convert audience or customers from the general market to join your niche market. (if your product or service is of a kind that people can make the switch)

Eg. Food products – Consumers can switch from using vegetable oil to cholesterol free oil

Dressmaking – customers can switch from their usual tailor to use the services of a niche tailor because s/he specializes in suits or slit and kaba etc.

Financial services – customers can switch from using one company’s products to another because of a particular service that has been introduced in the niche company eg. Free financial accounting set up for SMEs for the first 3 months or free business support to women’s groups which bank with the institution etc.


– There’s a common misconception that crafting a successful niche marketing campaign is all about finding an audience or customer base which is as small as possible and then creating a strategy that only serves that audience.

– Actually, one of the ways to build an effective campaign is uncovering an underserved niche market and then creating a strategy that makes everyone want to be a part of that niche

– You need to not only speak to your potential niche customers, but also activate members of your general audience who may not yet have realized that they can also be your niche customers.


2. Marketing to your main niche audience

– Although having a niche has its advantages, there is still the challenge of reaching this small, subset group and marketing

them effectively.

■ After all, how many people in Ghana want to buy fish fillets (if that is your niche) or buy a luxury home or travel insurance or eat in an Indian restaurant which provides only Indian cuisine?

– It almost seems like marketing to a niche market is harder than marketing to the general public, but there is a way to do it effectively.


■ For both methods discussed, you need to :

This applies to all areas of marketing, but is especially true for

reaching your niche market.

For example, if you own a bakery that specializes in French bread

and pastries, your audience is motivated by very different things

than the people who will buy bread from the roadside so long as it is

bread.

Get to know their behaviors and find out their concerns, where they

go for their information and what drives them to come to you.

A good place to start is by talking to your customers directly.

Know Your Niche Market WELL


■ One of the most important aspects of niche marketing is determining your unique selling proposition.

■ Your unique selling proposition needs to be ‘engraved’ on your brand from the very beginning. It is the one defining element that sets your business apart and it should guide everything that you do—from marketing campaigns to product development and everything in between.

■ It may be tempting to say that the quality of your products or services or your packaging is your USP but a truly effective unique selling proposition should go much deeper than that.

Determine Your Unique Selling Proposition (USP)


■ It is important to keep in mind that your unique selling proposition may not necessarily be a single benefit or offering.

– It may be a coming together of factors which put together, delight your customers and turn them into lifelong brand advocates who always choose your business over your competition.

■ Here are some questions to ask as a guide, to find your unique selling proposition:

– What can you offer your customers that no one else can?

– Why should your customers bother buying your products and services?

– What value does your business bring to your customers lives?

– How can you use what you now know about your customers to alleviate their challenges or problems more effectively?


■ In the process of defining your niche, you will probably

discover some good ideas for products and services that you can now sell to your ideal customers.

■ Always keep an eye out for inspiration: Wherever there’s a customer with a challenge or problem, there’s a new product or service waiting to happen.

Come Up with a Product/Service or fine tune and revamp them


■ It is essential that your marketing materials reflect your new

niche ie. brochures, flyers, bill boards, adverts, website content, word-of-mouth from employees to customers etc.

■ Crafting the perfect content for a niche market is important. It sends the message to your audience about your new status

Specialize and tailor the content of your marketing materials


■ To build a successful niche marketing campaign, you need to sell more than just a product, you need to sell a lifestyle.

■ Telling a compelling story about your brand is one of the best ways to showcase exactly why your product is the perfect fit for your customers’ lives.

Tell a Story

Eg. of story telling ■ MTN mobile money TV advert

– Story about a man who forgot his wallet at home and was stranded in a taxi because he couldn’t pay. He then sees the MTN mobile

money sticker on the taxi and realizes that the taxi driver accepts mobile money. So he pays his taxi fare with mobile money, pays for food at the restaurant with mobile money and the following day intentionally leaves his wallet at home since he has experienced how MTN mobile money makes his life easier.

– Other stories… MTN university campus love story for product targeted at the youth, coca cola story using Ghanaian names

Converting your general audience

■ When your marketing efforts are geared towards converting your general audience to become part of your niche audience, there is the need for

■ Niche marketing is all about providing an audience, especially one that might feel ignored or undervalued, with a sense of identity and belonging.

■ This “Us vs. Them” mentality is a powerful psychological trigger known as the Social Identity Theory.

Exclusivity

Converting your general audience

■ When you’re building your niche marketing campaign, it is effective to contrast your niche audience with another group to emphasize that not only are they different, but they should be proud of being different.

– By discriminating against the out-group, the in-group boosts their sense of self-esteem and belonging.

– You need to emphasize the resilience and uniqueness that make them special.

Example

■ All the children who drink Milo in the advert run faster and win the competition. And those who did not drink it end up being the losers.

■ Ie. the advert thus reaches out to people who do not drink Milo to join the bandwagon so they can also win

Marketing to your niche

■ When your marketing efforts are geared towards marketing to your niche there is the need for

■ A niche market needs to be reached on particular marketing channels, which means your business doesn’t need to be active everywhere – radio, tv, website etc.

■ Choose the best channels where your niche audience spends time. Churches, community events, youth programmes, using gong gong beaters, social media etc.

■ If your niche audience are mainly semi literates, don’t focus your energies so much on brochures and flyers, rather on word-of-mouth and picture illustrations of your new niche

Selective

Marketing

ENTERING YOUR NICHE MARKET -

STRATEGIES Session 4

Entering your niche

■ In addition to choosing the appropriate marketing strategy, it is crucial to determine the timing of the introduction of your niche product or service.

– Should you be the pioneer of the niche product or service?

– Is being an innovator worth the risk?

– Is it better to wait and learn from the experiences of the first entrant to the market?

– If you are a pioneer, what can you do to prevent share erosion when a new player enters the market?

– If you are a late entrant, what strategies should you adopt to make your entry successful?

Entering your niche

■ In determining an entry strategy into your niche market there are various factors that need to be considered however, one critical factor that should not be overlooked is that of COMPETITION.

– Are there any competitors at all in your niche market?

– Is the competition significant or can you get a portion of their market share?

– What tactics and strategies is the competition using to get maximum market share and attract more customers?

how can you punch holes in their strategy to your advantage?

Entering your niche

■ Studies show that it costs more to be a pioneer in a niche market. Let’s understand who a pioneer is.

– Product pioneer:

first firm to develop a model or sample in a new product/service category

– Market pioneer:

first firm to sell in a new product/service category – The first product/service to enter the market

■ Whichever the case, your institution is the first in terms of a specific product/service or in terms of a new market

Entering your niche

■ Why is it expensive to be a pioneer?

– Introducing a new/niche product or service requires a higher investment in research and development than

product/service imitation, and

– The necessary marketplace education and testing makes the pioneer spend heavily on advertising and promotion. A

second or late entrant enjoys the fruits of the pioneer's labor

Entering your niche

■ On the other hand being first to the market provides a significant and sustained market-share advantage over later entrants.

■ Why? Because the pioneer:

– owns the positive image and reputation of being a pioneer,

– creates a base of loyal customers

– gains a competitive advantage

– is rewarded with huge profit margins and

– retains a monopoly-like status

– can make imitation by competitors as difficult as possible

Entering your niche

■ Notwithstanding, late entrants into a niche market can also succeed by adopting distinctive positioning and marketing strategies.

■ As a late entrant seeking to discourage any more newcomers, as well as establish yourself in the market, you need to have a thorough understanding of the strategies available to you.

■ Some of these are discussed

Strategies for late entrants

■ Common attacking methods used by late entrants

Price discounts

Cheaper products/ services

Prestige products/ services

Product proliferation

Service innovation

Distribution innovation

Product innovation

Process innovation

Advertising innovation

Strategies for pioneers

• A simple strategy is to match any price cuts by the competition with similar discounts, as long as the price war does not get out of hand and erode profits

Pricing

• Adding new features or capabilities can be a positive and appealing way of countering a competitive challenge.

Features

• A company can respond to competitor price-cuts or new features by emphasizing after-sales customer care, implicitly demonstrating that it stands by the superiority of its products.

Service

• A strong public campaign demonstrating commitment to the market, confidence in the products, or a willingness to meet the competitor’s challenge.

Advertising

Entering your niche

■ Based on our discussion on how to enter your niche market you may now be in a position to determine what strategies to adopt in case you are the pioneer or late entrant.

■ Questions??

Resources

■ Anand Srinivasan - Business.com : ‘Your Mark: How to Carve Your Own Niche In a Saturated Market’

■ www.PittmanUnlimited.com – ‘How to Define a Niche in Your Target Market’

■ Hakan Köroğlu, Kazim Bayram & Kübra Sulukan – ‘Niche Marketing’

■ Gurumurthy Kalyanaram and Ragu Gurumurthy – ‘Market Entry Strategies: Pioneers Versus Late Arrivals’

■ David Lavenda - 10 Steps For Successfully Launching A New Product Or Service

■ Kevin Donnelly - How to Use Niche Marketing to Build a Business from the Ground Up

https://www.fastcompany.com/3004920/10-steps-successfully-launching-new-product-or-service