What is a niche?

When introducing a product to a new market, defining the target market is crucial, as it shapes the go-to-market strategy, including product development and marketing efforts. Companies can choose to target broad mass markets or specific niche markets, with the latter offering benefits such as efficient targeting, strong network effects, and the potential for market dominance. Niche markets consist of a defined set of customers with unique needs, allowing for the development of tailored products and messaging. While mass markets are vast and offer significant potential, they come with challenges like competition and diluted efforts. Niche markets, although smaller, enable more focused strategies and can serve as stepping stones to larger markets. To succeed in a niche market, companies should understand customer needs, leverage network effects, and engage in targeted marketing efforts. Success is measured similarly to mass markets, with metrics like revenue growth and customer retention. Despite their advantages, niche markets also carry risks, such as being too small to sustain a business or lacking sufficient demand for a niche product.