Benefits and problems of niche marketing

Benefits and problems of niche marketing


Business owners thinking about specialising their products and services to target a niche market should know the benefits and risks of this business strategy. Niche marketing is the business strategy of targeting a specific subset of a market.

Here are some benefits and problems of niche marketing that will help you build a business strategy right for you.

Benefits
Niche marketing can provide the following benefits:

  • Less competition as the base of interested customers is narrowed
  • Increase brand loyalty as you are providing goods or services difficult to find and customers are more likely to return to invest
  • Gain a higher profile among the interested customer base as the target market and competition is small, more people are likely to know your business name

Problems
However, niche marketing has its pitfalls you should know before you specialise:

  • The smaller market makes growth difficult as there is not a large customer demand
  • You increase the risk of your business failing if there is a disruption to your niche market, for example, if a larger company joins the competition or the good or service you provide becomes obsolete due to innovation
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If you believe the matters discussed above are relevant to your business, please contact Darren Smith of our office to discuss further.


Darren is a Chartered Accountant with extensive experience, including working in the big 4 and medium sized firms before becoming a partner of a city based firm in 2000.

He has gained much experience and has extensive knowledge in providing business and taxation advice, superannuation planning, negotiation of sales and acquisitions of businesses and property development. His client base covers a wide range of industry groups.

Darren works with business owners to grow their businesses and create personal wealth within and outside of their business.


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