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The proper use of "niche"

dknise

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I'm continually seeing the improper application of the concept of "niche."

A lot of new guys to entrepreneurship love to throw around how "niche" their idea is. It kills me inside.

What niche is not:
We are a mobile advertising company, but were not just any mobile advertising company, we're a mobile advertising specifically targeted towards women between of the ages of 21 and 25 around the Los Angeles area who have an interest in joining new social circles.

What niche really is:
We are a mobile advertising company that specializes in brand recognition. Our company offers unique services providing a targeted ad experience specifically to get consumers to remember your product, unlike any other service on the market.

In what niche is not, the company is just another copy of an existing company that specifically targets one group of people. That is called limiting your potential market, with a product that may be useful with many other markets.

In what niche is, it is a competitive service within a saturated market that takes a new approach to the industry. There is no limited market, just a unique distribution with unique tools for the job.

One of the biggest offenders in the local Seattle area has a GREAT product that everyone who has tried it loves it and continues to buy it... but... they specifically market it towards latino men who like soccer. I am not joking. Keeping up on their business and their sales, I'm often surprised why they chose to limit themselves in saying who their product was meant for.

I know I've brought this up a couple times, but I just thought I'd make an official thread for it because I see this happen all too much in brainstorms for new ideas. And of course, I understand there will be some of you coming to the "left handed asexual German kittens from Antarctica" is still a huge market and will support the niche that I hate... in which case best of luck haha.

Cheers.

:thumbsup:
 
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OzGrinder

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I have to disagree with your definition of a 'niche market'.

women between of the ages of 21 and 25 around the Los Angeles area who have an interest in joining new social circles
Is in fact a perfect example of a niche market. It's not about simply limiting your product to this market (although that's part of it) it's about targeting the market by solving a need specific to this particular niche market in a way that more generic products or service providers don't or can't. Oftentimes a premium is charged to counter the relatively smaller market size.

The examples you've used aren't particularly effective in demonstrating this. The 'what a niche is not' is a demonstration of an advertising company specializing in advertising to a niche market. This CAN be effective, if and only if the need is their for clients to target said niche AND the advertising company is providing skills, and experience that allow them to target this niche better than any other generic advertising company. In that instance they'd likely charge a premium to their clients for the specialty service and capture a market segment that might have been previously neglected by the more generic ad companies.

What you've used as the 'What a niche really is' example doesn't target a niche market at all. It just sounds like any other mission statement for a mobile ad company, they're providing nothing specialized, at least not that I can tell from that mission statement...

Niche markets are limited by definition as they are a subset of a larger market, this is in direct contradiction to your definition. It IS about limiting your potential market. However it is done in such a way that you're providing so much value to the niche that they're willing to pay a premium because you can provide a service or product to your clients that is specifically tailored to their needs, and solves specific problems the more generics either can't or don't want to tackle.
 

theag

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Well, there are niche markets and niche products. You described both. Two different things. Niche is only a word.
 

dknise

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Seeing as I completely disagree with everything you just said...

Me said:
And of course, I understand there will be some of you coming to the "left handed asexual German kittens from Antarctica" is still a huge market and will support the niche that I hate... in which case best of luck haha.
 
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OzGrinder

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Well, there are niche markets and niche products. You described both. Two different things. Niche is only a word.
A niche product is just a product that targets a niche market. :confused:

The main part I disagreed with was this:
it is a competitive service within a saturated market that takes a new approach to the industry. There is no limited market, just a unique distribution with unique tools for the job.
A niche market is by definition a smaller market segment.

Just wanted to demonstrate the point that there's nothing wrong with targeting a niche (ie. limited or specialized) market, as long as the market exists and you are providing value to it above and beyond your more generic (and often larger) competitors . Typically you would charge more for this added value.

Furthermore targeting a limited market segment can be an ideal first step for a startup to differentiate yourself from the more established competition, gain traction, and then expand to a broader market segment. If you have a product/service that appeals to a broader market segment, then you'd be silly only marketing it towards a 'niche', but that completely misses the point. The point is that, when done correctly, the product or service is designed from the ground up to cater for the 'niche'.
 

dknise

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It doesn't really matter.

Next are we going to read about the proper pronunciation?

People purposely setting their businesses up for failure doesn't matter?

Goodluck to you too haha.



And OzGrinder, by all means, go for it. If you want to purposely limit your market to left handed asexual German kittens from Antarctica, go for it.


Aight Imma edit this with some more, I'm just getting really frustrated listening to people failing because of their ignorent understanding of hitting a "niche."

Most of the "niche" areas I see startups trying to hit are like a t-shirt company only selling shirts in one size. They sell great shirts that everyone in the 18 to 30 crowd would love to wear, but they specifically choose only to sell mediums. They then go brag to all their buddies about how freaking niche they are and niche this and niche that, and the sales never come through for them. What would have been a better "niche," would be seeing the current local and national competition and creating a unique brand concept that hasn't been seen before. Tapout clothing did just that. If you really do disagree with that, then I honestly believe you're a lost cause.


I'm pretty fired up about this topic haha, cause I'm so sick of people misusing it for their company, paying the price, then wondering why.
 
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jon.a

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That's just a stupid business model. Why are you getting so anal about the word? Is this just a peeve that you need to pet?

People purposely setting their businesses up for failure doesn't matter?

Goodluck to you too haha.



And OzGrinder, by all means, go for it. If you want to purposely limit your market to left handed asexual German kittens from Antarctica, go for it.


Aight Imma edit this with some more, I'm just getting really frustrated listening to people failing because of their ignorent understanding of hitting a "niche."

Most of the "niche" areas I see startups trying to hit are like a t-shirt company only selling shirts in one size. They sell great shirts that everyone in the 18 to 30 crowd would love to wear, but they specifically choose only to sell mediums. They then go brag to all their buddies about how freaking niche they are and niche this and niche that, and the sales never come through for them. What would have been a better "niche," would be seeing the current local and national competition and creating a unique brand concept that hasn't been seen before. Tapout clothing did just that. If you really do disagree with that, then I honestly believe you're a lost cause.


I'm pretty fired up about this topic haha, cause I'm so sick of people misusing it for their company, paying the price, then wondering why.
 

dknise

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That's just a stupid business model. Why are you getting so anal about the word? Is this just a peeve that you need to pet?

Pretty much! It's not just a pet peeve, but it's a mistake that many entrepreneurs are making so it's good to be brought up. And like you said, it's a terrible business model, but I continually see and hear people championing that style model based on that it hits a "niche." Red Bull is huge because they hit a niche market, energy drinks, and have a unique taste and brand within the industry. There are plenty of other energy drink companies that have come and gone because they sub-niched the niche by targeting only men, only women, or only specific age groups. It's just good food for thought for everyone to have.

Every time I go to a local startup event there's like a constant echo of the word niche every 5 seconds. Everyone's funded... 90% of the companies do absolutely nothing... 90% of the companies focus on left handed asexual German kittens from Antarctica... and 90% of the companies fail.




...a pet peeves thread would be interesting too though haha
 

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