What is Niche Marketing?

Philip Kotler's definition of niche in Marketing Management is: Niche is narrower identification of certain groups, this is a small market and its needs have not been served well, or "have access to benefits" The basics". Niche marketing, also known as "gap marketing" or "fill-in-marketing", and also known as "slit marketing" refers to the use of marketing by companies to avoid positive conflicts with powerful competitors in the market According to its own unique conditions, it chooses a small market (called a "niche market" or "replenishment base point") that is ignored by powerful companies for various reasons as its special service object, and fully meets the various actual needs of the market. To achieve a marketing strategy that firmly captures that market.

Niche marketing

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Philip Kotler's definition of niche in Marketing Management is: Niche is narrower identification of certain groups, this is a small market and its needs have not been served well, or "have access to benefits" The basics". Niche marketing, also known as "gap marketing" or "fill-in-marketing", and also known as "slit marketing" refers to the use of marketing by companies to avoid positive conflicts with powerful competitors in the market According to its own unique conditions, it chooses a small market (called a "niche market" or "replenishment base point") that is ignored by powerful companies for various reasons as its special service object, and fully meets the various actual needs of the market. To achieve a marketing strategy that firmly captures that market.

Chinese name

Niche marketing

Classification

Economic terms

From

"Marketing Management"

Definer

Philip Kotler

Suitable for

SMEs

Prevalence

Global large-scale mass production capacity development

Niche (market) marketing is a relative concept to mass (market) marketing. In the eyes of the general public, it is mostly unknown and unknown, unlike the latter. Because of the huge demand for support, it often performs vigorously. Although it has a grand view, although there is no heroic behavior on the surface, niche marketing has indisputably become a marketing strategy that is truly suitable for SMEs, especially those in China that are still underdeveloped.

Since World War II, the global large-scale mass production capacity has developed extremely rapidly. Today, the ordinary needs of most of the world's population have been fully or even excessively met. On the other hand, the personalized needs of consumers are sweeping the world with the support of a solid material and technical base. As a result of the contradictory and interactive movement between large-scale production and personalized demand, the market shifts from producer-led production to customer demand-led, and the market shifts from a general seller's market to a general buyer's market. In a word, the power of consumers has reshaped the new market structure. In this situation, the individual needs of consumers have become the focus of competition.

The increasingly segmented market based on personalized needs has turned many large enterprises into tomorrow's yellow flowers, while bringing unlimited galloping space to countless small and medium-sized enterprises, although the space is divided into many small parts. The evolution of the above situation is a major objective reason for niche marketing.

Another major objective reason for niche marketing is the scarcity of resources. Chinese enterprises face the market

Niche marketing has the following advantages:

1. The target market of enterprises using niche marketing is small and single, which is convenient for enterprises to conduct market research. The purpose of market research is to provide firm and reliable basis for market changes for corporate decisions: the acquisition of these basis depends on the collection of market information and scientific analysis methods. Because slit marketing focuses on small market conditions, it greatly reduces the complexity of the target market research; market research can be carried out in a short time, and companies pay less for this, such as narrow product lines It is easy to achieve advantages in many aspects, such as the single geographical distribution of the target market and the strong consistency of market purchasing behavior, and it is relatively easy to realize the research goals. An effective analysis of these marketing determinants helps companies to understand the market thoroughly, so that they can take "short, flat, fast" actions to enter the market quickly and reduce the cost of promotions.

2. Using slit marketing to facilitate enterprises to strengthen customer service management. Based on the research on the target market, the company can grasp the target market behavior and the immediate needs of consumers, and realize that the needs of customers are exactly what the company must meet. In this way, enterprises can make product development and business adjustments in accordance with customer requirements. And because the slit marketing activities are concentrated in the small market, even if the company spares no effort to provide services to customer requirements, the overall operating cost of the company will not cause a great increase. Therefore, slit marketing has become a powerful weapon for the competitive advantage of most enterprises, especially SMEs.

3, companies using slit marketing, easy to grasp marketing goals. The marketing goal of an enterprise is not to be as big as possible. In a certain period of time, it must be matched with the internal resources of the enterprise, which is conducive to the enterprise's control of marketing goals and development direction. A company's control over its marketing goals depends on its strength and position in the market. Including; the market share of enterprise products, the brand loyalty of customers, the status of enterprise information systems and other core factors related to enterprise products based on the market. Because niche marketing is conducive to market research and mastery of market information resources, as well as brand loyalty established by effective services in the target market, companies have reasons to have confidence in their products' early market share. The company's grasp of marketing goals, comparison of internal resources, and trade-off strategies formed after weighing and weighing make the company inseparable from the market and achieve a better marketing environment.

What are the criteria for an ideal niche market? The author believes that an ideal niche market must meet the following five conditions:

big enough. The market should be large enough to meet the size and purchasing power of a SME;

Small enough. The market should be small enough for strong competitors to turn a blind eye to them and dismiss them;

Deep enough. The market should be deep enough to allow enterprises to develop without worries in the longer term;

Sufficient enough. The company's capabilities and resources are commensurate with the conditions needed to provide quality services to that market;

Reliable enough. In this niche market, the company's established credibility should be sufficient to fight competitors.

Generally speaking, there are five types of niche markets that SMEs can explore:

Natural niche market. In order to pursue the effect of economies of scale, many large enterprises generally use a small variety and large-scale production method. This naturally leaves SMEs with "slot zones" that are difficult for large enterprises to deal with. These "slot zones" are natural. Niche Market. Many small and medium-sized enterprises choose these natural niche markets to operate and grow up without competing with large enterprises.

Collaborative niche markets. For large enterprises producing complex products, it is impossible to make every process meet the requirements of economies of scale. In order to maximize profits or save costs, large enterprises have to cooperate with external enterprises in order to avoid the disadvantages of the "big and all" production system. This collaborative relationship provides a survival space for SMEs, namely, a niche market for collaboration. For example, there are 248 companies outsourcing by Toyota of Japan at one time, and these 248 companies have to issue out contracts to more than 4,000 companies.

Patent niche market. SMEs with patented inventions can use intellectual property to prevent large companies from infiltrating their own patented technologies into their product markets, thereby forming a patent niche market that is conducive to the growth of SMEs under the protection of the legal system. Ruhaohao Group Co., Ltd. is the largest baby stroller and children's bicycle manufacturer founded by the current patents in China. Since the birth of the first "Goodbaby" patent baby carriage in 1989, "Goodbaby" has accompanied its patents in Thrive under your protection.

Potential niche markets. In reality, there are often some that are only partially satisfied or not fully met or are cultivating upcoming social needs, which constitutes a potential market demand space, that is, a potential niche market. For example, in the computer industry, competition can be described as a sword sword, and new products are constantly emerging, but the demand for data exchange between several megabytes and hundreds of megabytes commonly used by people is ignored by the majority of computer manufacturers. Deng Guoshun, the president of Shenzhen Langke Technology Co., Ltd. saw this potential social demand and invented a small-sized (only thumb-sized) mobile memory-USB flash drive, which revolutionized the industry. Of course, the company has achieved rapid development. .

Alternative niche markets. After a thorough analysis of competitors, Professor Porter, a well-known American business strategist, concluded: "The best battlefields are those market segments where competitors are not fully prepared, not yet adapted, and are less competitive." The weak point of the opponent is our ideal attack point. The so-called weakness refers to the difference between the means and methods adopted by competitors in meeting the needs of consumers in this field and the highest satisfaction of consumers. Consumers' needs have not been well met. This is the market opportunity of "there can be replaced".

If a company has the ability to provide products or services that are more satisfying to consumers than its competitors, that is, it can effectively combat competitors' weaknesses, then this market can serve as its own target market. Application in market competition strategy. Toyota is positioned in the small car market in the United States, but this market is not a racetrack without rivals. Volkswagen's small cars are very popular.

Toyota hired a U.S.-based survey company to conduct a detailed survey of Volkswagen users and fully grasped the pros and cons of its rivals. Based on market research, Toyota accurately mapped out a target market divided by demographic and psychological factors. Designing American-style Japanese cars that meet the needs of American customers. The Toyota Corolla (CORNA) has finally knocked on the door to the US market with its small size, economy, comfort, stability, and ease of maintenance.

Some companies have spontaneously used niche marketing strategies and established their own business areas to achieve certain results. However, it is worth noting that niche marketing is not a panacea. Its use is conditional. Although improper use may cause short-term profit growth, it may cause long-term corporate earnings to decline or even dry up.

It is generally believed that the application conditions of niche marketing mainly include the following points;

1. The market has sufficient scale or purchasing power to make a profit;

2. The market has growth potential and will not shrink in the short term;

3. The company has the skills and resources to meet market needs and can effectively serve it;

4. Enterprises can rely on established customer reputation to defend their status and resist attacks from competitors.

The above means that if a company decides to enter a niche market, this niche market must be able to provide a series of possible survival environments for the company's foothold and development, that is, the niche market may become the target market of the enterprise.

Although many companies can explore and try to use niche marketing, under different conditions of the market environment, product competition, and product promotion strategies, their application focuses and steps are different. There are two general situations in which niche marketing is used.

1. For SMEs wishing to enter new markets, the general problems are:

(1) Enterprises have little knowledge about entering the market, such as market potential, user demand preferences, and competitors' marketing methods;

(2) The image and credibility of the company itself has not been recognized, recognized or accepted by consumers, and its visibility is low among its peers;

(3) The company's finances are subject to investment income. If it is attacked by a large competitor, it may be forced to withdraw from the market.

Compared with this, the advantages of SMEs are: the market adaptability is strong, and the movement to enter or exit the market is rapid. The above situation makes SMEs must use market analysis methods and methods to filter the market information (management system book customer service VCD production management VCD) and formulate appropriate strategies to give play to their advantages. When analyzing the market, pay attention to the following points:

(1) where the customer (customer) is located;

(2) the strength of product users;

(3) How does the purchase amount of product buyers change.

(4) what kind of services the major repeat buyers really need;

(5) What kind of promotion method to use.

The above analysis mainly believes that small and medium-sized enterprises are preparing to enter a relatively unfamiliar niche market. In addition to the necessary external conditions, they must choose the market through strict market analysis, establish goals, and provide their services in order to compete in the competition. It must be quite marketable.

2. For large companies that focus on market development and increase purchases, the focus of niche marketing is different.

In general, the problems facing large companies that want to adopt niche marketing may be: the market is saturated due to the impact of many competitors; product development deviates from technological development trends; it is difficult to change their product structure and corporate culture faster. Therefore, when doing niche marketing:

(1) Survey customers using the same and similar products;

(2) Identify customers who are not currently using, but who may use the company's products;

(3) Try to use existing products (lines) to develop new products;

(4) Find emerging markets.

Among them, (3) is the focus that big companies should pay attention to. With the technological advantages of big companies, developing new products is likely to form a niche market beyond the capabilities of other competitors. In this respect, the 3M company in the United States is an example. This company, which mainly produces films, adhesives and gums, has successfully developed its core technology to replace the migration of aircraft paints after encountering competition from many manufacturers of photographic film, tires and other manufacturers Film printing, large aircraft manufacturers, and large airline companies are so popular that they have captured this market. It should be noted that, because niche marketing is generally concentrated in a small market, when the demand in the market is affected by some kind of change or facing a strong positive attack from competitors, the sales volume is more volatile and the profit drops suddenly. Even if it is eliminated, in order to prevent the exhaustion of the filling base points and increase the survival opportunities of enterprises, once there are conditions, enterprises should pay attention to the development of multiple filling base points to avoid the risk of a single niche market. In fact, the growth and growth of enterprises is largely formed by the combination of "product-market" with multiple competitive advantages.

To think that niche marketing is a patent for SMEs is actually a plausible paradox. First look at a few examples:

The strength of Johnson & Johnson has obscured people's attention that they are also looking for niche ideas and strategies in the niche. In fact, the history of Larson, the fifth chairman and CEO of the board of directors, is the history of Johnson & Johnson's continuous strengthening and optimization of internal business. He has made each subsidiary's business more segmented and specialized, and has targeted the market. It is also more sexual, and Johnson & Johnson has become the sum of several companies operating in niche markets.

The Coca-Cola Company has established a large business around canned tea and coffee in Japan. These products are sold through vending machines, offering iced coffee in the summer and canned hot drink products in the winter. In order to expand the market, The Coca-Cola Company introduced Georgia's canned coffee beverage, its leading brand sold in the US market, to Japan.

In fact, relying on niche markets has brought high-speed growth to some SMEs that focus on them. The characteristics of high profit, fast growth, and strong core competitiveness of market niche players have long caused many contempt for niche markets Attention of big companies. More and more large companies are racing to set up small business units to serve various niche markets, which is the current market situation. Therefore, when SMEs enjoy the benefits brought by niche markets, they must always be prepared to protect the niche markets developed by themselves. If you blindly and optimistically view your niche marketing as your own patent, then I am afraid that it is not far from the disaster.