You Cannot Cater to the Masses
The old cliché says that "we can't be all things to all people". There's another which says "give them what they want! "We must focus our ideas toward a specific group which has wants and needs for that product which have not been met previously. So we must isolate the consumer group that we will eventually call our customers. We must separate that certain group from the masses. We must segment the market. A market segment consists of a large identifiable group within a market. If we practice segment marketing we recognize that customers differ in their wants, purchasing power, geographical locations, buying attitudes, and buying habits.
|Bull's Eye - Focus|
The benefits of segment marketing or segmentation are that it can create a more fine-tuned product/service offering and a more appropriate price for the target audience. Segmentation leads to specialization. And specialization leads to expertise with that market. Niches are subsets of the segmented market.
We can segment along several different lines, for example, by ethnicity, gender, age, geographic location, hobbies, occupation, etc.
The benefits of segment marketing are that it can create a more fine-tuned product/service offering and a more appropriate price for the target audience. Segment marketing leads to specialization. And specialization leads to expertise with that market. Niches are subsets of the segmented market.
A niche is a small market whose needs are not being met. Niches typically attract smaller companies. Niche marketers know their customers so well and provide them with what they want that they are able to charge a premium for their products and the customer is willing to pay that premium. Since the niche marketer knows his customers and products so well he is able to benefit by economies of scale. He is able to change his product/service offering because he is watching the changes in the niche market as the niche markets develops over time. The niche segment is not likely to attract other competitors, or the nicher is able to defend itself, and is able to grow and profit from catering to the target market.