When launching a website most people don't really pay attention to the market they enter. As the online market is really huge and it is really easy to take part in it, the most crucial thing to do when launching a product or service is to find and enter a niche. Read on to know what you need to analyze to make sure you find the right niche for your product or service.
What is a niche?
Simple put, a niche is a market place where there is high demand for something, but with very little offer. Here are basic charactersistics of a niche and a successful niche product:
- there is no defined standard leader in a certain niche market industry
- the demand for the product is very high
- there is no or little competition as well
- your product offers something substantially useful
- your product is unique as well
But why to niche?
As mentioned earlier, there is a lot of competition online. To be able to capture your share of customers, you need to stand out from the rest of your rivals. That's why entering a market spot with litle competition and still high demand is the most sensible thing you can do.
You may think that by entering a smaller market segment you will get less customers. This is not entirely true.
First of all, even a small share of an immense market is large enough to have customers. Secondly, when developing a site in a niche, you'll be able to get top spots in the search engines for non-competitive phrases, related to your product.
It is not as easy in a competitive niche. In a full [of rivals] niche, you won't get noticed from the search engines - you'll get even less traffic than you could get in a less competitive niche.
How to identify a niche?
When looking for a niche, you'll need to analyze both the demand and the competitors in the industry to ensure that you can sell your product or service as effectively as possible.
Naturally, you'll need to keep your potential product in mind when you analyze the market.
It may be hard to find a niche, as there are billions of people and billions of ideas. Clearly, you'll have to be very specific about the niche you want to occupy to be able to stand out and offer something unique and useful.
Finding a niche may be easier if you find a unique benefit of your product or service first.
Here is what you need to do to identify a niche:
- try to create a useful product with a unique benefit
- analyze the demand for the product
- analyze the competition
Analyze the demand
First of all, you'll need to know if there is a demand for your product or service. A demand can be spotted in the following ways:
- you talk with your friends, relatives, fellow forum members, bloggers and also ask them talk to their friends and relatives whether they might need your product or service or not
- you think creatively, out-of-the-box, to identify possible free niches in the already existing ones with high demand
- you follow all marketing news and trends and apply them to your industry niche of interest
Here are a couple of possible situations when you can occupy the niche:
- there is a popular product with no or little competition (MS Windows, PC)
- there is a popular product, but there is no complimentary product to this (a table, but no chairs, a DVD, but no box, etc)
- there is something people talk about but the product doesn't exist
- you instinctively know there should be demand for something, but there is no product
- you need something yourself, your friends, relatives, etc need something, but there is no such a thing
Seeking for an untapped demand is like seeking a seat in a crowded compartment. It is hard to see it, and it is likely that someone has already seen it, but when you notice it, you wonder "Why is this seat free?" and take it. (Of course, in real life, you'd rather offer the seat to an elderly or a young lady, but not so in business, right?)
Basically, you have already seen a niche when you tried searching for something you needed but didn't find it. Creating something useful for yourself and then distributing it creates a niche product.
Alternatively, instead of seeking a niche and being the first to be there (which is the best thing you can do), you can join an uncompetitive industry.
Examine the competitors
The easiest way to identify competition is through the search engines. Just enter a phrase that would describe your potential product the the most precisely and see for yourself.
When analyzing your possible competitors, pay attention to the following:
- whether the product matches what you want your product to be or not
- how detailed the product is (how well it is developed)
- time the product has been on the market
- the amount of content on the site
- the type of content on the site
Sometimes, you find yourself interested in a particular niche, but there already are some competitors. Here are a couple of possible situations you may find:
- there are, in fact, no competitors
- there is very little competition, often with only one outstanding product
- there are a couple of competitors, who know each other and have divided the niche between themselves
- there are several competitors, who are actually competing with each other
- there are many companies or individuals doing the same thing
- there are several competitors for every aspect of the product or service
Found the niche. Now what?
Naturally, with each of the competitive situation, you can take different types of action:
- enter your niche and become the first and the only expert in the field
- create a better product, or target another audience (different age, gender or budget)
- try to find a niche in the niche, so you don't actually compete with the few related businesses
- create the best product, work on its quality, customer service, achieve low production costs and create a unique product benefit - something to stand out with
- do the same as above, but spend more on marketing your product or service, probably increasing the breadth of your marketing coverage as well
- think of choosing another niche or do the same as the above, but use every single opportunity to best your competitors and reach more customers
Of course, the last course of action may be applied to any competitive situation to actually offer the best product and be the undisputed industry leader, but with highest competition the latter alternative is the only option to actually be noticed among the others.
In a nutshell
Establising yourself in a niche may save your hours, days, weeks, months and years of work as well as from going bankrupt before really starting your business. If you find a niche, create a unique, useful product, most likely, you'll be a leader in it and will reach success easier. As mentioned earlier, building your product on a unique benefit should really help you.