Niche Positioning In Business: Some Observations
Conventionally, we have always been told to dream big and go for the big prize. The same applies to the world of business where the dominant discourse has often been about capturing markets, having boundless reach and making astronomical profits. However, a general and expansionist approach does not necessarily guarantee success. Sometimes, a big idea needs to be executed on a small scale for a bigger impact. In other words, the idea of carving a niche, most literally, can make a gargantuan difference. However, what is a model of strategic small thinking? What can be gained by limiting ourselves to a niche? These concerns merit an assessment of their own.
Traditionally, niche positioning has not been met with the most amount of enthusiasm. The prospect of a smaller market for a specific product with relatively limited possibilities for growth can be disenchanting. However, businesses that try to cover too much can have struggles of their own. There can be avenues for losing the plot and an uncertain base of customers. In fact, as a study by CBInsights shows, a humongous forty-two per cent of startups fail because they do not focus on a niche and engage with a specific problem to offer a particular solution. Therefore, new discourses in business have been less and less oriented towards the general and tilted towards the specific.
Niche positioning can be a good thing, provided you have a vision for executing worthy plans. Finding out where you would like to make a contribution, coming up with a creative roadmap for the same and mastering that particular domain can lead to a spirited effort with a higher possibility of achievement. An article in Forbes quotes Judge Graham, a Texas-based entrepreneur to this effect,
“Don’t let your revolutionary idea die a quick death and end up in the overpopulated failed businesses cemetery,” said Graham. “We live in an age of specialisation. By deciding early on to choose and target a market niche, whether demographic, geographic, psychographic, product-oriented, or service, you take the biggest step towards positioning your company for scalable success and leadership.”
As several experts note, niche businesses which focus on specific products and markets enjoy a competitive advantage. Clare Archer, writing for Chron notes that narrowing the focus on potential buyers allows specialized businesses to implement marketing plans that highlight areas of a product that will appeal most to a certain demographic. Marketing strategies can be tailored to the specific product or service offered, creating a more effective overall advertising campaign and having a specialized business also makes it easier to pinpoint the target audience. Working as a niche business in a niche market is all about staying true to your mission and creating a rigorous strategy while maximising consumer satisfaction. There are no compromises in this model of thinking small and the rewards can very much be gigantic.
More than anything, niche businesses often address the unacknowledged needs of people and the potential for creativity in this area is immense. Multiple noted publications report the story of Nicole Smith, a former Microsoft employee who started Flytographer in 2013, a service to connect travellers with photographers to take photos of them when they are on vacation. Not only has this business appealed to an unaddressed need of consumers but has also proven to be richly rewarding, spreading across 63 countries and generating a revenue of millions of dollars through word-of-mouth publicity. As is well-documented, Starbucks followed a similar trajectory, serving customers unsatisfied with poor-quality coffee beans by providing a complete package of authentic coffee with a stimulating experience of enjoying it. While it first appealed to coffee connoisseurs, it eventually emerged as a giant success through a tremendous word-of-mouth promotion and the rest is history.
These success stories populate a hall of fame where intrepid entrepreneurs capitalized on specific demands and came up with pathbreaking solutions. Niche business ideally is thus not about limiting ourselves but exploring limitless opportunities in the realms we operate in. It is a strategic and sagacious way of creating value by not chasing vacuous and pompous goals but achieving the humongous in the smaller domains we can contribute to. Thinking specific and acting strategically is a worthy endeavour and we must let niches be our stepping stones to summits of glory.
