L-5358 (RM1-2.0)
8-00
Robert B. Schwart, Dean McCorkle and David Anderson*
The word "niche" comes from a French word that means to nest. Niche marketing is targeting a product or service to a small portion of a market that is not being readily served by the mainstream product or service marketers. Nearly every business fast food chains, convenience stores, even Wal-Mart was begun to fill perceived voids in the market place. However, niche marketing usually refers to small or moderate size businesses or farms that produce a specialty product or service for a limited segment of the market. Market niches can be geographic areas, a specialty industry, ethnic or age groups, or any other particular group of people. Sometimes a niche product can be a variation of a common product that is not produced and marketed by the main marketing firms.
Examples of niche markets are listed in Table 1.
It is obvious from the table that niche marketing is everywhere. Sometimes the niche served is so narrow that the product is aimed at one small group within a market. One example is the dairy operation supplying kosher milk to a large Jewish population in New York City. The dairy producer hired a rabbi full time to observe the management and milking activities on the dairy so the milk produced can be sold in the kosher market. In this case the dairy producer has a portion of the market to himself.
In other situations, the market is somewhat more open, and competition can develop to provide the product or service. For example, when the large, confined dairy operations moved into north central Texas, many of the peanut growers who no longer had quotas (because of peanut policy changes) began producing corn silage for the dairy operators.
Niche marketing is servicing a portion of a unique market, or a unique portion of a common market, not already served.
Recognizing Niche Marketing Opportunities
There is often little difference between recognizing a potential business opportunity and recognizing a niche marketing opportunity. Sometimes people find themselves in a niche market without planning it. Perhaps there is a product or service you need but that is difficult to obtain in your area, so you begin providing the service for yourself. You might soon find that others are asking you to provide it for them also. Examples are custom welding and hoof trimming. So, one way to recognize the potential for a niche market is to think about those goods and services you need. Perhaps others in your community come to you for advice, help or a certain kind of service. Do you seem to be recognized as the expert at something everyone needs? Is this service or product something you could do for a fee? An example is custom haying.
Table 1: Niche Market Examples.
| Sector | Product | Niche |
| Agriculture | Timothy hay | Race horse feed |
| Agriculture | Kosher milk | Religious groups following dietary laws |
| Agriculture | Organic vegetables | Consumers wanting foods grown without pesticides |
| Agriculture | Extra fat beef | Asian export market |
| Agriculture | Corn silage | Confined dairy operations and beef feedlots |
| Agriculture | Custom farming services | Other producers who do not have the resources to perform these services |
| Agriculture | Pasturized goat milk | Consumers allergic to cow milk |
| Consumer durables | Sport utility vehicles (SUV) | Drivers desiring a vehicle with room, power, and strength |
| Consumer services | Internet auction sites | Consumers desiring low prices for goods and services without having to physically move from merchant to merchant |
| Consumer services | Commuter airlines | Smaller communities not served by large airliners |
| Consumer services | Cut your own Christmas trees | Fellowship, recreation, and consumers seeking quality |
Many people have hobbies they enjoy, or develop special skills. Sometimes these hobbies
and special skills can evolve into a niche market. An example is handmade furniture sold at
craft fairs.
Getting Started
Getting started and establishing a strong business requires certain steps:
The Business/ Marketing Plan
A business/ marketing plan is many things. It is a map to follow in achieving your goals; it is a statement to family, potential investors and others involved in the business about your projected performance; it is a statement to your banker about your credit worthiness.
The business/ marketing plan contains the following:
Getting the Help You Need
You will need advice and help to plan and establish your niche marketing business. One of the best sources of help is people who are doing something similar. Find out who is doing what you hope to do and learn from them. Seek reference material from libraries, the Internet, teachers, Extension agents and specialists, and the news media. Visit trade shows and fairs. In short, network!
There are risks in beginning any new business venture, but with planning you can be
successful. There are many opportunities in niche marketing.
Here are sources of additional information on niche marketing.
*Professor and Extension Economist, Extension Economist Risk Management, and Assistant Professor and Extension Economist, The Texas A& M University System.
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Partial funding support has been provided by the Texas Wheat Producer's Board, Texas Corn Producer's Board, Texas Farm Bureau, and The Houston Livestock Show and Rodeo. |
Produced by Agricultural Communications, The Texas A&M University System
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Educational programs of the Texas Agricultural Extension Service are open to all citizens without regard to race, color, sex, disability, religion, age or national origin.
Issued in furtherance of Cooperative Extension Work in Agriculture and Home Economics, Acts of Congress of May 8, 1914, as amended, and June 30, 1914, in cooperation with the United States Department of Agriculture. Chester P. Fehlis, Deputy Director, Texas Agricultural Extension Service, The Texas A&M University System. 1.5M, New ECO