Niche Market Strategy – Definition

Cite this article as:"Niche Market Strategy – Definition," in The Business Professor, updated April 28, 2019, last accessed October 20, 2020,


Niche Market Strategy Definition

A niche market caters to the specialised needs of a select audience. It targets a small segment of the market. It offers products or services in an industry vertical that is oft neglected. It capitalises on the gap in supply for specific demands by strategically placing itself as a one stop shop for all ‘niche’ products and services in a particular category.

A Little More on What is Niche Strategy

As an example of a Niche market, consider a group of people who are interested in buying accessories for bikes. A business that sells auto parts might do the trick, but a niche brand that solely caters to bike accessories, with products and services that are exclusive to its brand, turns into the first stop for consumers who are in the market for these products. More subsets of this niche might include Bike modification services, bespoke designs, and more.

What’s the strategic advantage of establishing a niche market?

  • It facilitates ease of market share capture in the given niche by meeting a majority of the demand in the niche category.
  • There’s less competition as another small business might not want to take on an already established brand locally.
  • Large businesses mostly ignore such brands and don’t directly give them any competition.
  • It’s a good toehold to enter into an established market with larger scope.

Obviously, as with any idea, there’s the drawback of inviting stiff competition if your brand is very successful. Others with more resources might want to replicate your business model. Large enterprises might also want to get a chunk of the action and create a niche arm catering to your audience.

Niche Market Strategy capitalises on the gaps in supply for a particular demand that has a growing audience easily accessible as clients. Identifying such gaps and working out the growth potential is the key to creating a niche business.

Example of Niche Markets

Brands positioning their products as ‘Organic’ are catering to the growing demand for such products. Companies position themselves as products brands that avoid any sort of animal steroids or antibiotics.Niche businesses that sell farm grown, free range, country chicken and eggs are addressing the demand for poultry products that do not come from industrialised poultry farms, weighed down by antibiotics and have a 100 other harmful side effects.

References for Niche Strategy

Academic Research on Niche Strategy

Niche market strategy for a mature marketplace, Parrish, E. D., Cassill, N. L., & Oxenham, W. (2006). Niche market strategy for a mature marketplace. Marketing Intelligence & Planning, 24(7), 694-707. This article proposes and expounds on a Niche Market Strategy for an established marketplace.

Niche strategy and export performance, Zucchella, A., & Palamara, G. (2006). In International Marketing Research (pp. 63-87). Emerald Group Publishing Limited. This paper delves into the Niche Market Strategy deployed by small businesses to exploit the export goods industry.

Niche strategy: Merging economic and marketing theories with population ecology arguments, Noy, E. (2010). Journal of Strategic Marketing, 18(1), 77-86. This paper examines the long term viability of Niche Markets in light of changing population ecology.

Tourism, niche strategy and networks as factors for both entrepreneurship and rural sustainability, Dinis, A. (2011, June). In IX Rural entrepreneurship conference: a sustainable rural (pp. 21-29). This paper presents the relationship between rural sustainability and entrepreneurship in light of factors like Niche Strategy, networking, and tourism.

Early and accelerated internationalisation: the role of the niche strategy in a new generation of exporters, Zucchella, A., Hagen, B., Denicolai, S., & Masucci, M. (2016). International Journal of Export Marketing, 1(1), 27-47. This study explores the export business and the niche business strategies at play in this sector.

The formation of core technical competencies based on niche strategy [J], Zhang, M. E., & Tian, D. (2005). Studies In Science of Science, 3, 019. This paper explores the technical aspects of Niche Business Strategy.

The niche marketing strategy in internationally-oriented small and medium enterprises: A literature review and lessons for New Zealand, Stachowski, C. A. (2012). Small Enterprise Research, 19(2), 96-112. This paper presents a literature review of international niche business strategies deployed by small and medium businesses in New Zealand.

On Market-niche Strategy [J], MA, J. J., & LI, X. C. (2007). Commercial Research, 5, 045. This paper presents an in-depth view of Niche Market Strategy.

Research on the Niche Strategy of Innovation in Complex Products and System [J], ZHANG, M. E., & TIAN, D. (2007). R&D Management, 3, 003. This paper explores the niche strategy involved in research and development of new products.

Study on Implemented Niche strategy of New Geography Curriculum [J], JIN, S. L., & ZHOU, J. B. (2010). Journal of Shangrao Normal University, 6, 021. This paper reviews the Niche Strategies deployed in modern geographic curriculum.

Niche Marketing Strategy and Firm Success: Review on SMEs in Peninsular Malaysia, Akbar, F., Razak, A., Omar, B., & Wadood, F. (2015). International Journal of Research & Review, 2(11), 697-702. This paper explores the small and medium businesses market in Malaysia and analyses their niche business strategies relative to their success.

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