What Are Market Niches? (With Benefits And 10 Examples)

By Indeed Editorial Team

Updated 13 December 2022

Published 28 April 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Companies that operate in niche markets compete against fewer businesses, become experts in their field, and gain loyal customers. In a niche market, companies focus on a unique target market, and instead of marketing to everyone, they create marketing strategies catering to a specific group of people. Being familiar with the market niches and how they work is the key to building a successful business. In this article, we answer “What are market niches?”, explore its numerous benefits, discover ten examples of a niche market and understand the steps to find such a market.

What Are Market Niches?

The answer to the question, “What are market niches?” is that they are smaller segments of a large market with specialized demands and preferences. Organizations that target niche markets offer products that meet specialized consumer needs.

Companies operating in niche markets reach a smaller audience and they cater to the unique demands that help build loyalty and generate revenue. For instance, rather than offering all kinds of women's shoes, a company can focus on shoes for plus-sized women, shoes for nurses, or shoes for party occasions. These are examples of different niches or segments within the larger market for women's shoes. You can refine and divide nearly every large market into a niche market.

Related: What Is A Target Market? (Definition, Importance And Tips)

What Are The Benefits Of A Niche Market?

The benefits of focussing a company's service or product on a niche market are:

  • Ensures less competition: As a niche market focuses on a particular segment of customers, there is less competition. In addition, companies that implement good marketing strategies may have fewer competitors in the same niche.

  • Builds brand loyalty: Having a niche market can help businesses build a strong customer base by engaging with a smaller audience. Customers become loyal to brands when they cater to their specific needs.

  • Ensures higher profit: Often, niche businesses have a higher profit margin because they cater to the customers' specialized needs. Niche businesses have low competition, so customers are willing to pay more for products and services.

  • Ensures greater expertise: Focusing on such a market empowers the company to understand the market segment better. With more expertise, the company can better solve customer problems.

  • Enhances customer loyalty and engagement: When a company addresses the problems of a specialized market, customers are likely to engage with them for the long term. Customers prefer interacting with companies that understand their needs and requirement.

Related: What Is A Brand Manager? Requirements And Job Description

10 Examples Of Market Niches

Here are ten niche markets to consider:

1. Remote working employees

The changing nature of the industry and technology has resulted in many employees working from home. These employees have specific requirement that differs from those who work in an office environment. Due to these specialized requirements, such employees and employers are an excellent niche market to target. Marketers can focus on these employees by providing affordable home office equipment and technological upgrades that make remote work easier.

Related: How To Stay Focused When You Work From Home

2. Travel

While the travel market is vast, there are various niche markets within the travel industry. Businesses who want to make an impact in the travel sector can consider specializing in travelers who are:

  • environment-conscious

  • work abroad for a long-time

  • stay in holiday rentals

  • interested in exploring uncommon tourist places and activities

3. Home organization

This niche market caters to customers who want to restyle or renovate their existing homes. Companies can segment this market by targeting customer goals. The goals can include improving functionality, maximizing space utilization, and altering the interior design. For instance, a niche market in the home organization can comprise homeowners planning to create a modular and smart kitchen.

4. Health and wellness

Like travel, health and wellness is a large market that caters to customers who want to better care of their health. There are many market niches in the health and wellness sector, including:

  • skincare

  • beauty products

  • fitness

  • nutrition

  • supplements

A company can further narrow down the market niche by considering the target market's demographics, interests, and values. For instance, you can provide plant-based health supplements to people who want to lead a vegan lifestyle.

5. Do-it-yourself (DIY)

Rather than hiring professionals, some people prefer to complete tasks themselves or purchase pre-made products. These customers are a part of the DIY niche market. Companies targeting this market provide the customer with the material, tools, or skills to accomplish a DIY task. Through their products, these companies help customers create something new. For instance, a business can target the DIY niche market of the paint industry by providing pre-made paint solutions and tools using which customers can paint their homes without relying on a professional.

6. Specialised diets

It is common for people to follow a specialized diet to remain fit and healthy. Some people might follow a specialized diet because of allergies, sustainability concerns, or simply because they want to switch to a better lifestyle. These consumers might find it challenging to find and prepare a specialized diet. This makes dietary requirements a potential niche business. Companies can further market this segment by either focusing on food selection, preparation or consumption.

For instance, if you want to provide a sugar-free diet to customers, you can sell sugar-free ice creams, sweets, or chocolates. You can help customers make sugar-free ice-creams by publishing a recipe book.

7. Education technology

Education technology is a field that focuses on teaching various skills to a child. Many education tech companies focus on children with special needs, while others might focus only on toddlers. Apart from segmenting the market based on age, companies can segment the education sector by subject, skill set, or technology platform.

Related: What Is A Special Education Teacher? (Skills And Salary)

8. Home security

Another popular and profitable niche market is home security, which helps people keep their houses and belongings safe. In addition to offering safety solutions to customers, some businesses may teach elders and children about various home safety practices. Companies can offer doorbells connected to web cameras or smart digital locks connected to a customer's phone.

9. Safety preparations

There is a growing market for people interested in preparing for unexpected events and emergencies. This market comprises different subgroups, such as preparation for outages, droughts, fire safety, and cyclones. Companies in this niche can provide safety services or products with a prolonged shelf-life that consumers can use during such events. For instance, you can create practical plans or manufacture tool kits for disaster management for clients who live in areas prone to frequent flooding and drought.

10. Dating and relationship

Companies can segment the market of dating and relationships in several ways. For example, you can design an online dating app that caters to people with a specific hobby or interest. Another method of creating an opportunity in the dating and relationship industry market can involve targeting customers at a particular stage of their relationship. For example, you can design products aimed at middle-aged couples.

How To Find A Niche Market

Use these steps to find a niche market:

1. Determine your interest and strength

Start by identifying your interests and strengths. Focus on exploring your area of interest and the people you enjoy working with. Consider these questions before selecting a niche market:

  • What specific problems do you solve?

  • What is your area of expertise?

  • Who do you want to serve?

  • Which niche or market do you know?

Getting answers to these questions can help you focus on a particular market.

Related: How To Determine What To Do With Your Life

2. Perform research

After having an idea about the niche market, conduct research to understand whether it is feasible. Also, perform a competitive analysis to understand whether there are competitors and how they conduct their business. Knowing what people are searching for can help you understand a niche market.

Related: How To Become A Market Research Analyst: A Complete Guide

3. Know your ideal customer

You can offer a better service or product when you know your ideal customer. You can gain insights and knowledge about the niche market by closely monitoring the requirements and needs of the customer. To better know your audience, conduct surveys and find out what interests them. It is also important to understand how your business can provide value to your customers by analyzing their buying behavior.

4. Test your product or service

Build a landing page or website for your business to test your product or service. Customers can use it to find your brand. Like traditional marketing campaigns, create different niche marketing campaigns and review the results. Give customers a free sample or a free trial of your product. If offering a free trial does not yield the desired results, consider altering your strategy.

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