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Niche Market | Exclusive Explanation

A niche market is a poorly or unattended part of a large group of consumers. A hidden opportunity within a broad and competitive branch of business.

Do you know or if you have already

  • What niche market is and how to find yours? 
  • Are you sure you are betting on the right niche?


Finding a niche and discovering new niches over time is critical to building a successful business. However, knowing which market to attack can be challenging for many entrepreneurs.

If you are starting your business now, finding your niche should be the first step in your market strategy. At that point, you need to be accurate in your investments and a good niche market can yield you the first customers. And help your company reach financial health quickly.

On the other hand, if you are an experienced entrepreneur and you already have a defined niche. You should be prepared to review it at any time.

In the end, the market changes regularly, creating new niches for established companies to expand their products. And you can’t stop expanding simply because you can’t see these opportunities, right?

Therefore, in this article we are going to definitively clarify what a market niche is? (do not confuse the niche with a segment), and help you step by step to discover or rediscover your place of action.

At the end of the reading, you will be able to do the mapping of your company. And you will know exactly where to invest your resources. So watch out and get ready.

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What is the market niche?

A niche market is a poorly or unattended part of a large group of consumers. A hidden opportunity within a broad and competitive branch of business.

A common mistake made by advertisers and entrepreneurs is to use niche and market segment as synonyms. If you also confuse these concepts, you have to know that the difference between them is in the specificity of the group in question.

A market segment is a group of consumers with similar interests and pains. It is the broadest cut of an already known consumer market. While the market niche always refers to a tiny and unexplored group.

That is, the market niche is a small part of a segment. For example, if your company operates in the health area, that is a very large market, right?

Within it there are several segments such as: health and well-being, children’s health, women’s health, health of the elderly. All very exploited. Each of these segments is represented in your company by a specific consumer profile, with their own needs and desires a person.

Let’s say that the person in the health and wellness, segment is looking for state of the art beauty products and international quality. A competitive market that is always lively.

But within that same segment, the number of people in search of vegan hypoallergenic products has grown. Who are not finding those products at an affordable cost.

This group of potential clients has different pains from your health and wellness person, and is not having their pains resolved by any company. Therefore, it constitutes a new person and a great opportunity to expand your business. And there is a market niche there.

A great example of a company that identified the emergence of a market niche, and quickly escalated by investing in it is Uber. Which revolutionized the world of transportation, by offering quality private transportation at popular prices via app.

But you don’t need to discover a rising niche and create a super innovative product like Uber to be successful. Actually, the secret to being successful in any niche is knowing your market in depth, as we will explain below.

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What is the importance of defining a market niche

If you enter the market as a generalist brand, offering products for a wide segment. You will be losing one of the biggest advertising currencies that a brand can have specialization.

As a generalist brand of a segment, your communication will reach a large number of people. Who are impacted by dozens of messages from companies like yours, without there being a truly assertive solution proposal.

If you sell yourself as a specialist in a niche market. You will reach a smaller number of people, since you are focusing on solving a specific problem.

However, this communication will be much more accurate, since you will communicate directly with potential clients. Who want a solution for their pain.


What are the other benefits of defining a market niche?

* Effective marketing plan – With a well-defined market niche, you can create a really efficient marketing plan communicating directly with yourself.

* Fewer competitors – If you find a niche by definition you will be working with a group of underserved consumers, in an under-exploited market.

* More advantageous prices – As you will act in a little or no exploited market. You will be able to dictate the values ​​of the business and obtain more profits, even if you have fewer sales.

* Ease of closing strategic alliances – Knowing your market of action, you will know how to easily differentiate a good business partner. Who can really bring good results to your company. From a bad partner, which will only be a waste of time and energy.

In other words, defining a market niche is important to ensure that all your invested resources. Including time, money and labour are transformed into public recognition and are translated into sales and income for your company. And now that you know the importance of a niche market, we can talk about ways to identify one.

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The four types of market segmentation

As you have already learned, the niche market is a little or no exploited part of a consumer segment. However, in addition to analysing the business’s competitors.

You can use the characteristics of the consumers themselves to get to know a segment in depth and find a niche for your company to invest in. In general, characteristics can be segmented in four ways:

  • Geographic,
  • Demographic,
  • Behavioural,
  • Psychographic


Geographical segmentation

Geographical segmentation is based on the location of the consumer market. This spatial clipping can be done by:

  • Continent;
  • Country;
  • State;
  • City;
  • Neighbourhood;
  • Region.

But you should always keep in mind all business competitors who occupy the same place. For example, if you are an entrepreneur who wants to open a physical establishment such as a bakery, a good way to find your niche is through geographic segmentation.

Just look for a neighbourhood where there is only one bakery. So you will be meeting the demand of a population victim of a monopoly, or no bakery to attack an unexplored market. It is important to highlight that this segmentation is of little value for those who act in the digital market .

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Market niche based on demographic segmentation

Demographic segmentation, in turn, takes into account aspects of the consumer market population, such as:

  • Age group;
  • Gender;
  • Rent;
  • Occupation;
  • Race;
  • Generation;
  • Nationality;
  • Social class;
  • Schooling, among others.

As these are characteristics that directly influence shopping habits. Demographic segmentations are widely used in advertising to build target audiences. One example is McDonald’s, which designed the Happy Meal especially for children between 7 and 10 years old.


Market niche based on behavioural segmentation

Behavioural segmentation is linked to the consumption habits of customers:

  • What they are looking for?
  • What you need?
  • What they know?
  • What they consume?
  • In what quantity they consume?
  • How often, etc.

Smart Fit for example, is a large network of gyms that explores a behavioural market niche. Serving clients who always want to exercise. But have a very dynamic routine to always be able to go to the same gym and at the same time.


Market niche based on psychographic segmentation

Lastly, the psychographic segmentation considers aspects such as the personality, lifestyle and values ​​of the consumer. Group such as attachment to environmental causes political positions, tastes and personal characteristics in general.

Groups are psychographic segmentations that:

  • They have the same preferred musical style;
  • They follow veganism or vegetarianism;
  • They are against animal testing;
  • Have lactose intolerance;
  • They defend feminine freedom, etc.

An example of a company exploring a psychographic niche is Soul Power. Which harnessed the explosion of curly and frizzy bloggers. As a female empowerment tool to make products specifically for those women, such as curl setters and finishers.

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How to discover your niche

If you are able to create a market segmentation, it is time to use this knowledge to find your niche. We’ve listed five steps to get there here. Join them!

1st step:

Find out in which market you want to act

Today there are endless possibilities to create a business, especially when it comes to digital businesses. But the only way to thrive as an entrepreneur, whether you’re digital or not is by having a passion for your market.

One of the fastest and worst ways to fail as an entrepreneur is to bet on a market just because it is rising. Sooner or later the high level of collection and large volume of work, end up weighing in the balance and without passion.

The possibilities of being demotivated and giving up are enormous. In other words, look for an opportunity in a market that you know and like, okay?


Step 2:

Identify a problem

If you know in depth the market in which you want to operate. Perhaps you already know what problem you want to solve, and you only need to validate it.

But if you don’t already know, you can uncover unsolved problems by searching social group forums on the internet.  Even researching keywords related to your market on Google and analysing market segmentations.

Be attentive to any questions or feedback that consumers in your market leave for the most popular brands. As they can yield great ideas that large companies sometimes miss.


3rd step:

Assess your knowledge

You already have a market and you have discovered a problem, but with what property can you propose a solution? To be a specialist in a niche market, you need to master that branch of business thoroughly .

If you’re not the most knowledgeable person in a conversation on the subject, you study until you are. Another important point is live what you speak. Try your solution in your day to day life and be your own success story.

To create a successful vegan food brand, knowing the definition of veganism is not enough. You need to understand and embrace the entire discussion. About animal rights to get an honest conversation with yourself, and convince them that you have the best solution.


Step 4:

Observe the demand

Remember: your niche must be based on a real problem. A real problem, when solved, causes the lives of several people to be significantly transformed for the better. This is why people search for a solution and even consider paying for it.

In other words, there is demand. You can discover the existence of a lawsuit by observing comments and searches, that people make on the Internet.

Another great way to get confirmation is by interviewing potential customers about their purchase intentions. If no one is buying a solution, the problem you want to solve may not be so important.


Step 5:

Analyse the competition

A market is not attractive if there are already dozens of companies trying to solve the same problem. Therefore, look for the existence of other competitors.

Ideally, there are no competitors when you are discovering a niche. But as that scenario can be quite utopian, keep an eye on the volume of competitors and their tools.

If there are few competitors and you have a promising spread. Invest If not, you might be better off looking for another niche. And now, do you still have doubts about how to identify your niche?

No problem! Below, we have made a questionnaire that can help you, so answer it honestly.

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10 questions to discover your niche:

  1.  Why do I want to work in that market?
  2.  Do I really know the problem I am trying to solve?
  3.  What is my rating to solve this problem?
  4.  Is there a group of people affected by this problem?
  5.  What can happen to them if this problem is not solved?
  6.  What are the main interests of the people who suffer from this problem?
  7.  What are the pains and needs of these people?
  8.  What do my competitors offer as a solution?
  9.  What differential do I intend to offer?
  10.  Would anyone pay for a solution?

Have you answered all the questions and the result was a super-positive scenario? Congratulations, you have found your niche.


Tools to help you find your niche

In addition to the previous questionnaire, we list here other tools that can offer interesting data when identifying a market niche. They are:


The search engine’s autocomplete can give you lots of ideas for acting niches. Simply use the name of your product as a keyword + add-ons such as “from” or “for” and product characteristics or adjectives.

The results are possible niches to invest!


Another Google tool that can give you various insights is Google Maps, especially if you are geo-targeting. You just have to investigate the type of establishment + the desired spatial cut. Ex: lottery in the Center of Buenos Aires.


The Buzzsumo is perfect for discovering which markets are on the internet and on social media. With a quick search, you get a very complete notion of what the people who relate to your brand are talking about. In addition to that, it is possible to anticipate consumer trends and follow the key terms for your business.

Google Trends

Another awesome trend spotter. It gives you the growth of searches for a certain term over the years, showing an increase in interest. You should only use the keywords, that you discover in the search engine to find out if the niche you are looking at is on the rise.


One of the best competition analysis tools in the market, SEMrush will help you identify the real existence of a market niche and its volume of competition on the internet.

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Find out what your competitor’s top keywords are, the number of keywords you dispute, and move on.

Keyword planner

This is another Google tool that can make all the difference in your search for a niche market. While the Google search engine can suggest keywords for you. The Keyword Planner will help you discover similar keywords, with the name of your product and offer a range of business possibilities.


The Facebook groups are also excellent sources of ideas as they gather to discuss prospects for brands and products. It’s important to monitor discussions, annotate comments, and even search.

For example, brings together thousands of people interested in hair dye for redheads and yields several insights for cosmetic brands. Which after a lot of accompanying the discussions launched a new toner based on the requests of the group members.


Quora is basically a more serious version of Yahoo! Answers. There are thousands of people from all over the world exchanging knowledge every day.

In it you can filter the topics by area of ​​interest and find many entries about your market segment. In the comments, several consumers commenting on their unmet needs and unanswered questions.

That is a full plate to find your niche.

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How to become an authority in your niche

Did you find your niche? Excellent! Now is the time to work hard to become an authority in your field of action. The advantage of being an authority is obvious. When people recognize you as a specialist, they trust you. Therefore, they follow your recommendations and buy your products.

However, building authority is a long process, which depends on several details that will demand a lot from you. But we guarantee that it will be worth it in the end, ok? Let’s go!

Produce and distribute quality content

When a person investigates their problem on the Internet and you answer their question, you are building authority. There is no better way to show complete mastery over an issue than by teaching other people. Therefore, invest in Content Marketing to build the image of your company.

Produce quality content that really creates value for you and surpasses the content of your competitors. A good suggestion is to use current data and statistics to reinforce your knowledge on the subject.

Invest in a professional brand

It is useless to know your niche in depth and have an innovative solution, If all contact of your company with the person is done in any way. Investing in branding is essential if you really want to be a market authority.

The language, tone of voice, colors and all your presentation must be coordinated to pass an image close to that of the person, but also professional and efficient. Your brand is your most precious asset after customers, so don’t neglect it!

Offer a unique experience

As you may have noticed, most of the work to become an authority is marketing efforts. But that’s not why you should neglect the other processes, right?

Imagine a sales consultant offering lousy contract closing experience, for example. “In the blacksmith’s house, wooden knife” cannot be a rule here.

All the actions that your company performs must compose a unique experience for the customer, from marketing to after-sales. Keep your speech professional and consistent to be recognized as a reference in your niche.




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