As we continue on in this business building segment, I wanted to take a second to identify niche markets. Many companies and business strategies right now are focused on not necessarily catering to the masses, but specializing in a smaller subset of customers. These subsets are called niche markets.
A niche market is a focused and targeted portion of the total market. A company or a product category will address a need that is not recognized by the mainstream market. These ventures are generally profitable because of a lack of interest or specialty resources in large businesses.
The key to capitalizing on a niche market is to find or develop a niche that has customers who are accessible, that is growing fast enough, and that is not owned by one established vendor already.
Facebook has been in the headlines recently for opening up its registration to everyone. It may be beneficial to the networking site to do that for monetary reasons, but they will be diluting their brand. They are abandoning their ‘niche’ of college students in favor of broader consumer appeal.
A good example of targeting a niche is the specialty auction sites that are radiating through the internet. Ebay swallows up the whole, but what if someone wants a selection of previously owned golf clubs to choose from (this is just for example’s sake, I don’t do much golfing!)?
If nothing of that sort is available, then welcome to your niche!
tags: niche, niche markets, facebook, business, business building, entrepreneurs, innovation, marketing
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The Facebook issue is a good learning opportunity. Here’s a company with both a brand and an engine. One possible motivation for opening up to non-college students: we’ve developed the engine, now let’s use it to serve more people. (The engine, in this case, is their software and database structure.) Great idea, but there are other ways to achieve the goal: a similar site for other groups of people. Just like one corporation can own Old Navy and Banana Republic. Build a portfolio of niches, using common back-office systems.
However, it’s possible that Facebook decided that they wanted to benefit from the brand they created, not just the engine. In that case, they have to consider effects on their brand. One positive: people outside colleges want to use it. One possible negative: college students want protection from non-college students, like old-man pervs who might lurk. (Just like upscale diners don’t want to sit next to families with loud children.) However, it’s also possible that college students want to be able to connect with their non-student buddies. This is where a company has to know its customers and what they value. One possible strategy that might have worked better is to offer by-invitation access to non-students, just like one needs an invitation to open a G-mail account.
The moral: figure out the asset you have, and why it’s an asset, before trying to fully exploit it.
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