Be a Pioneer
Let’s face it; if you own a small or mid-sized company, you can’t compete with, say, Hudson’s Bay, Magna, Wal-Mart or Microsoft.
But you might find a niche those big corporations are ignoring and exploit it. The key to success for many companies is coming up with a specialized product or service aimed at a specific group of consumers. For example:
Position Your Niche
After deciding on a niche, you need to promote it.
Position the product or service as unique or a distinctive alternative to the competition. Of course, promotion strategies generally depend on the type of business and your marketing budget.
Nevertheless, there are some common elements in marketing strategies:
1. Identify customer needs and be responsive to them.
2. Offer reliable and competent service.
3. Know the competition and be on the lookout for new competitors.
4. Know the break-even point and set prices that recover the cost while still attracting customers.
5. Spend as much as you can on a regular basis to promote the niche.
6. Highlight the features that distinguish your product or service from the competition.
Even if you’ve been in business for 20 years, you may still come across a niche that can add to your company’s success, offer a new career or just allow you to follow a dream.
For example, cattle farmers could focus on serving a demanding consumer market by raising certified organic beef, natural beef or certified hormone-free beef. That’s assuming the niche idea is good, they’ve done research and come up with a good marketing strategy.
Niche ideas come from many sources: a skill or hobby; a new way of doing something; or frustration when searching for a product or service and realizing others are probably going through the same thing.
Here are some steps that can help you come up with ideas and evaluate their potential:
Make a list. Include hobbies, skills and interests, as well as things you hear people complain about. Ever hear someone say: “I wish someone would think of a way…? Brainstorm with employees, colleagues, friends and family for potential niche candidates.
Devise keywords. To get a rough idea of demand, turn your ideas into keywords. Then go to Internet search engines and type in “Overture Search Term Suggestion Tool”. Enter one of your keywords into the tool and in about 30 seconds, you will get a list of how many searches were made in one month on that keyword and variations. For example, a search for espresso maker found a total of 7,995 searches in one month. Of course this shows only the number of Internet searches, but it can help get a sense of potential demand.
Research seriously. When examining a market, answer these questions, among others:
1. What is the demand for the product?
2. Who are the consumers, where do they live and how do they shop?
3. How extensive is the market?
4. How much of the market can you expect to capture?
5. Is it a growth area?
6. How will your product or service fit in?
7. What does the competition look like?
Interview potential customers, talk to other entrepreneurs and use resources such as the local chamber of commerce, hobby and trade magazines, Industry Canada, Statistics Canada, as well as other government agencies and industry associations.
Databases can help determine buying habits in specific areas. For example, do shoppers in Ontario tend to buy high price, high quality products? Or do shoppers in Alberta tend to look for a good deal?
As you develop a niche, try to find the optimal mix of product, demand, services, price and marketing strategy (see right-hand box above for a few marketing tips). You don’t want a $3,000 product if you can only sell a few each year.
Have Fun: In any business, it helps to enjoy what you’re doing. Passion for your business can make the difference between success and failure.