The Niche Marketer

The Niche Marketer competes for a market segment or geographic region that the market leader does not consider to be important.

Because it is not critical, the market leader will be less concerned so is less likely to respond to competitive activity. A niche marketing strategy is also called a flank attack.

  • The selection of a niche (or segment) of the total buying population.
  • Advertising and promotional campaigns to specifically target segments or territories.
  • Product customisation to suit specific needs.

The niche strategy, in some form or another, is one of the most popular of challenger strategies.

Since many markets are well-segmented, and market leaders may be large so less able to serve niche markets, it offers opportunity for smaller competitors to secure market share, some of it very profitable. To be able to undertake this strategy, the niche marketer needs to have sufficient resources to defend its niches from other competitors that want to acquire its market share.

Why Choose A Niche?

Trying to appeal to all people is destined to fail. People’s needs and preferences differ and to meet those needs and preferences a business is required to take different approaches. What works for one group of customers may be a dismal failure for another.

Given that resources are limited, and scattering effort has been shown to be ineffective, businesses try to identify, and then target, the most strategically advantageous of the niches available to them. The use this as a method to ensure maximum effectiveness of their advertising spend and distribution channels.

The basic aim of segmentation is to provide marketing focus on a like-mind group or cluster of customers. Depending on the business you are in, this criterion for segmentation can differ.

Market segmentation starts with a database which keeps records of customers. Information including contact details and purchase history should be inputted across multiple fields to enable reports and lists to be drawn up based on different criteria. Running database information through a cluster analysis tool may help the business to identify groups of customers with common needs. Keep segmentation to a maximum of 4-6 clusters to avoid difficulty in managing it.

Depending on the industry you are in, and the type of customer you have, you can use a variety of variables to segment your market. These include:
Demographic Variables such as:

  • Age
  • Income
  • Location
  • Race
  • Religion
  • Income
  • Education

Psychographic Variables such as:

  • Faith
  • Motivation
  • Beliefs
  • Propensity to buy
  • Loyalty
  • Willingness to adopt early
  • Personality characteristics

Business to Business Variables such as:

  • Industry type
  • Company size
  • Type of products bought
  • Breadth of products deployed/Loyalty
  • Profitability
  • Location
  • Sales cycle (short versus long)
  • Sales type (simple versus complex)
  • Strategic Importance
  • Transactional importance

Of course, the most challenging aspect of segmentation is not arguing the benefits of why it should be done, but how to ensure it is done in the most effective way.

How to Segment a Market.

The most typical process companies follow is to break the buying public into a manageable like-minded or similar cluster. (Which variable you use will depend on the type of industry you are in and what best suits your business. Knowing, however, what motivates buyers is particularly helpful to many consumer-facing businesses.)

It may be that you try a number of different combinations, assessing individual segment attractiveness, before making a final decision on your segmentation model. For many businesses, getting segmentation right is a process of experimentation which leads them towards refinement of the model.

  • Growing
  • Measurable in quantitative terms
  • Able to satisfy the sales volume and revenue targets your business requires
  • Channel-compatible with your distribution arrangements
  • Compatible with your company’s capabilities and competences
  • Able to deliver the profitability for your business to prosper and grow.


  • The relative strength of competitors and the level of competitive intensity
  • Customer, supplier and other external pressures
  • Number of accounts and their size (particularly in the B2B environment)
  • The type, similarity and level of innovation of products by competitors
  • Ease of entry and exit in the market.
  • The likelihood of the entrance of more competitors in future.
  • Likelihood of growth of the segment.
  • Segment profitability over the desired period of time.
  • How well positioned your business is in that part of the market.
  • Ability to defend the niche.


Marketing Strategy Requirements.

The niche marketing strategy requires a business to be prepared to forfeit pursuing other niches in order to focus its efforts singularly on the segments it has chosen. This strategy is particularly useful for small businesses that will struggle to compete against large competitors. This is because it is often not financially viable for a large competitor to allocate resources to a small part of the market, albeit a lucrative niche for a smaller concern.


  • The selection of a niche (or segment) of the total buying population.
  • Advertising and promotional campaigns to specifically target those segments or territories.
  • Product customisation to suit specific segment needs.
  • Communication messages created that are relevant to the needs of those segments.
  • Delivery of communication through channels that the segment uses to source information.

If a business decides to pursue multiple segments, and it has a significant brand profile built, it may consider launching multiple brands to point into multiple niches. This avoids creating brand confusion amongst customers.

Maintaining Your Leadership in a Niche.

If you have reached the point that you are the strongest competitor in your niche with the most market share of that niche, you have become a market leader.

To maintain your position you need to play defence to protect your leadership.
READ: How Challenger Brands Attack – Part 1 and What Market Leaders Do – Part 1


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