Finding your market niche
At K Magill & Company we can provide businesses with help and advice on a wide range of business issues. Here are some thoughts on finding your market niche...
Generally, only the largest companies can hope to meet the needs of an entire market. For most small to medium-sized businesses, a key factor in business success is finding niches in the market, and exploiting them by offering specialised products or services to specific groups of customers.
Researching the market
Careful study of the market will almost certainly unearth opportunities for products or services that you are well-equipped to provide. The first step is to conduct research into existing companies in your field, with a view to understanding the areas in which your competitors are already well-established. You might use this information to create a table and help you visualise the gaps in the market where you'll meet the least direct competition.
Areas of differentiation
Here are some of the factors to consider:
- Your company ethos and image
- What message do you promote to your customers? Are you the small and friendly face of local business, or the fast-moving, forward-thinking organisation at the cutting edge? Writing a mission statement can help you to focus on your ethos and image.
- Quality of product or service
- Do you offer the highest quality product for the top end of the market, or are you going for 'value for money' and a wider appeal? In what ways is your product or service superior to its competitors?
- Pricing strategy
- Are you aiming to undercut the competition, or do you attempt to attract the more 'discerning' customer?
- Customer service
- Why should customers prefer to deal with your company? Do you offer better customer care, including aftercare, or a more efficient ordering system - perhaps online?
- Are you effectively targeting a particular area with specific local issues, or conversely, should you be expanding into areas not covered by competitors?
- Do you offer finance packages, credit deals or guarantees that set you apart?
It is important to avoid complacency about exploiting niche markets. Continue to monitor your customers' needs - perhaps with regular questionnaires - and analyse your customers to spot further opportunities for profitable specialisation.
A good database will allow you to analyse your market information and help you spot patterns that you might otherwise overlook. For example, do customers in certain geographic areas consistently purchase expensive, top-end products. If so, you might want to tailor your marketing strategy and concentrate your customer care resources accordingly.
If you are looking for assistance from experienced accountants and business advisers, contact K Magill & Company.