By definition, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. A niche market may be thought of as a narrowly defined group of potential customers.



A distinct niche market usually evolves when a potential demand for a product or service is not met by any traditional supply form, or when a new demand arises due to changes in society, technology, or the general environment.

Niche market ventures may become profitable even though they are by nature small in comparison to the mainstream marketplace, due to the benefits of specialization and focus on small identifiable market segments; even without the benefit of economy of scale. Niche markets may be ignored or discounted by large businesses due to what they consider to be small potential. This small potential can translate into larger profits for a savvy niche marketer. This in part is the basic concept that makes the niche markets available to smaller businesses. The key to capitalizing on a niche market is to find or develop a market niche that has customers who are accessible, that is growing fast enough, and that is not owned by an established vendor.

Etymology

The term "niche" was first used by ecologists to describe a species' position and use of resources within its environment. When used in business the term implies a situation or an activity perfectly suited to a person or a given type of personality. This concept has been extended from persons to products within a market segment. Whereas a niche in the strict sense can be a working position or an area suited to a person who occupies it, the market niche is perfectly suited for a product of human labor. Marketing in and for niche markets

Niche marketing is the process of finding and serving profitable market segments and designing custom-made products or services for them. As mentioned earlier, for big companies, those market segments are often too small in order to serve them profitably as they often lack economies of scale. Niche marketers are often reliant on the loyalty business model to maintain a profitable volume of sales.

Online Niche Marketing

Online niche marketing is often used by affiliate marketers. By seeking out smaller segments of larger markets, a website can be developed and promoted quickly to uniquely serve a targeted and usually loyal customer base, giving the affiliate a small but regular income stream. This technique is then repeated across several other niche websites until a desired income level is achieved.

Niche blogging is the act of creating a blog with the intent of using it to market to a particular niche market. While it could be argued that all blogs are, in some form, a niche blog, the term as it applies to marketing refers to a particular kind of blog.

Neither blogging nor niche marketing is a new concept. However, only in recent years has the concept of a niche blog come into being.

Usually, niche blogs will contain advertisements of some sort (pay-per-click or products or both). In some cases, the purpose of the niche blog is to incite the reader into visiting another website which may then attempt to sell the reader a product or service.

Niche blogs are sometimes referred to as splogs, but this is a misnomer. Even though the desired end result for the niche blogger is to make money, the niche blog itself often contains valuable information. Most pay-per-click advertising is content-sensitive, so it is vital to the niche blogger to have useful content that is related to the chosen niche.

Why are niche blogs are popular?

The popularity of niche blogging among new marketers can be attributed to several factors, including cost, adaptability and traffic generation. All of which are conducive toi start up business, particularly those that originate online.

The most significant reason for the popularity of niche blogging is the cost. Using services such as Blogger and Wordpress, niche bloggers can quickly and easily create a blog for free. In this way, the marketer can determine the viability of the selected niche before making a large investment of time and money.

Adaptability

Because people's interests often change over time, it is important for a successful marketer to stay up-to-date on current trends. By using free services, the niche blogger can quickly adapt to the changing market and create a new blog marketed to that niche.

Traffic generation

In order for a website to be profitable, it must have visitors. Normal websites require search engine optimization or paid advertisement in order to gain visitors. Blog services like Blogger, on the other hand, incorporate Really Simple Syndication (RSS). Using this technology, the niche blogger can inform various online directories of the blog's existence. They, in turn, provide links to the blog. Visitors to these directories are then exposed to the blog's listing and may choose to visit the blog. Thus, the directories act as a marketing tool for the niche blogger.