Niche marketing on the net

These days it is quite difficult to find something in common with everyone in the world, apart from being human, but there is one thing that comes close: Internet users. There are about 2 billion of them according to internetworldstats.com. From a business point of view, this is the biggest market sitting in one place, but what product or service can you provide for all of them?

Google got it right: every Internet user needs to search. Facebook has a hefty slice of the Internet pie with over 500 million users by their own stats. However, there are not many others to talk about since Internet users are not all the same.

Let us get a bit more realistic now. Suppose you come up with a product, say dog food, and market and sell it on the internet. You have narrowed your customers to only dog owners but that is still a massive audience who are willing to pay to feed their dog. The problem you face here is that the market is still too big and there are so many corporate dog food manufacturers that gobble up all the small fish and leave you broke.

What next? Narrow your market further. Market your dog food purely for Labradors. You might manage to make a couple of bucks but probably not much more.

So you narrow your market further, to dog food for racing Labradors. Suddenly you have customers paying for your product because it is exactly what they are looking for. You add more products to your line up, dog collars for racing Labradors, dog soap and shampoo for racing Labradors, etc. You get the point. The more you specialise, the smaller your market, but the more loyal your customers.

This is the essence of niche marketing; identifying a small portion of the market with a specific problem and offering products and services marketed directly at solving that problem. You are in effect monopolising a particular market.

This was extremely difficult before the internet; how many owners of racing Labradors could you find in your neighbourhood, or even city?

Chances are that there are not enough to be profitable. However, you now have a medium to access all those racing Labrador owners, and indeed any niche market, throughout the world - the internet.

This is what has made starting a business so attractive in recent times. You find something you are good at, need, or have a problem with. Then creating a business around that becomes easy because you are both the expert and the end user.

There are, however, some pitfalls. If your market is too broad, you will have too much competition, as already explained. If you find a niche market but you define your market too generally, you could end up with a lot of competition very soon after you start. If you are not good, it will be easy for someone to copy you, improve on it and steal all your thunder.

There is also the problem of recognising a market that is too small to ever be profitable. At that point you either have to give up the idea or do some charity to get it out.

That is why it is always important to test the market and start off with low costs and capital, because you could end up losing very quickly. Here again, the internet saves the day.

Since the target is small, your aim also needs to be good. If you do not present your product in the correct light, it could get lost in the internet because it is not attracting the right people. Direct, straightforward and pin-point marketing strategies need to be employed, no more of this wishy-washy subliminal nonsense.

If you get everything right, however, you could end up making a substantial amount of pocket money. It is the ideal business for a student; niche marketing means you do not need to be a jack of all trades, but putting all of your eggs into one beautifully woven basket could prove profitable.