DISCOVERING PROFITABLE NICHE MARKETS
The difference between a successful and failed business
DISCOVERING PROFITABLE NICHE MARKETS
- The difference between a successful and failed business -
By Fabian Agore
Running a successful business is not as difficult as you think. Plus you can become a multimillionaire in a flash.
The foundation really, is in discovering a niche market.
A niche market is a business opportunity that is ignored by others in your country or state or city. It is a market with high customers demand and little or no players. It is an underdeveloped market. For example, the makeup business was a fantastic niche market when Tara Fela-Durotoye ventured into it. It was ignored by other players in Nigeria when she came in, but today it is no more so.
3 Reasons why niche markets trumps crowded markets any day
1. High profitability:
As the first entrant into the market, your profit margin will certainly be higher, as the customers do not have much options. Johnson & Johnson’s Listerine mouthwash and Cold stone Ice Cream comes to mind.
2. Market dominance:
You have the first mover’s advantage to dominate the market before other competitors comes in to play catch up. This is the reason Domino’s is growing and expanding across Nigeria before the likes of Papa Johns, Little Ceasar, Pizza Hut will come into the Nigeria market. DSTV dominance in Nigeria cannot be ignored.
3. Customer Loyalty:
More customers would be loyal to your brand since they encountered your product or service first and if you continue to up your game, plus if you serve them right, they just might remain loyal for a long time if not a lifetime. You will recall how Indomie beat dangote’s noddles and how dangote cement is thrashing BUA, Lafarge and it’s other competitors.
Strategies for discovering niche markets
1. Look for popular products or services in other countries:
Popular products or services in other countries like United States that are not available in Nigeria would serve as pointer to discover niche markets. We can say that hotel.ng (Nigeria) must have been inspired by hotel.com (US).
2. Observe and analyze the corporate trends in your country:
In the early 2000 there was a trend in bank growth and expansion and that saw a lot of young men and women gaining employment in the banking sector and the resultant pressure and demand on them to meet and exceed their marketing and performance targets. my business partner and I observed that bankers and banks will buy training services that was tailored to meet their needs and we went ahead to build a multimillion naira training consulting business out of it.
3. Follow the economy:
The economy will tell you what consumers would be willing to spend on. What consumers spend on during economic boom differs from what they spend on during economic slump. You can equally find a niche that’s a necessity regardless of the economy. I met a gentleman who was into construction business and now does waste management because the construction industry in Nigeria has slowed. A waste management business will survive in good or bad economy, plus loads of people will ignore it because it’s not prestigious.
4. Look at an existing business that is poorly managed and tweak it:
Chicken republic is a better managed version of Mr Biggs and Tantalizers with an infusion of new products on its menu and a different ambience. You can still create a niche in the food, fashion, cosmetics, auto parts and maintenance, real estate, management consulting, entertainment, interior decoration, supermarket, health and wellness, etc industries.
I may have used more examples of well established and big businesses, but that doesn’t take away the fact that you can discover a niche market, start small and scale.
Discovering a niche market increase your chance of succeeding in business by 50%. If brainstorming and research is not your strong suit,
then you can enlist the service of an expert to ensure you get it right from the get go.
A niche market makes doing business fun and easy.
