There once was a business philosophy that the best product, according to the experts who designed it, was all the market needed. Yet, customers tend to disagree with the experts about what makes the best product. Market niches to the rescue.
Some customers like blue cars and some like green. Other customers like chunky peanut butter and some like smooth.
Variance in individual preferences leaves room in the market for entrepreneurs to solve problems or fill these divergent unmet needs and desires. And, discovering those untapped market niches can be easier than you think.
Market Niches for Everyone
The business landscape is a long way from the 1920s when Henry Ford decided that America needed only one car: his Model T.
Ford believed he would own the market by making the perfect car. But Alfred Sloan at General Motors knew better.
Ford learned the hard way that the customer knows best.
General Motors (GM) dominated the market by making specialized cars for each customer preference. The car options offered by GM proved itself, with GM overtaking Ford in market share.
All industries show abundant niche opportunities to cater to ever-changing customer expectations driving new market demand.
The multitude of preferences allows companies to specialize in an unimaginable number of products and services. From design to delivery methods, to cost, to purchasing options the opportunities remain endless.
Fifty years ago there was no Coke Zero, there was no Diet Coke. Coca-Cola made Coca-Cola. Tide made Tide. Crest made Crest.
Marketers adapted to the endless needs of their customers, brands started branching out, and smaller companies found room in previously untapped niches.
Now, not only does Coca-Cola make a whole range of drinks, they face competition from niche soda and drink entrepreneurs making specialized drinks for curious customers with particular tastes.
Where the Unmet Needs, Desires, and Problems Hide
There are basically two ways for smart entrepreneurs to find untapped niches. The first is to find and solve an unsolved problem. The second is to find ways to make new innovation valuable to people by filling needs and desires.
Finding problems to solve is easy enough, but solving them often isn’t.
The problem with problems: most of the easy ones have already been solved… unless you find them first.
A programmer that notices an easy software fix to some common networking problem may make bank selling niche software. They discover the problem by having deep expertise and understanding of their current work. Finding these problems tend to be more common amongst skilled job holders with an entrepreneurial eye.
For example, Richard McGirr, founder of Visichain, a supply chain and procurement transformation software company in Hong Kong, discovered this lucrative niche while he was running a general software and web development company. In his former role, he noticed Hong Kong’s booming supply chain industry and its need for digital transformation (a need uncovered in his former job).
Now Mr. McGirr heads a company of over 60 developers focused on the supply chain and procurement software niche. Some of his clients include a few of the world’s top 10 global retailers. This translates to multi-million dollar contracts.
Without having been in the place, Hong Kong, and the industry, software development (along with deep industry expertise), it would have been impossible for Mr. McGirr to discover this profitable niche.
On the other hand, hard problems, such as carbon emissions, are easily identifiable. Yet, they remain unsolved. If they were easy to solve, thousands of people would’ve already done it.
You can find business niches by looking for problems to solve. Head to the internet and see what people complain about, especially on niche forums and social media.
When people in a bathroom design group on Facebook often complain about the lack of a certain style of bathroom fitting, a new niche line of bathroom fittings in that style might be a good bet for a resourceful entrepreneur.
If people often complain about the low quality of local restaurants, that area may have room for a niche high-end restaurant business. These are the obvious opportunities you’ll come across when you are looking.
As for filling people’s needs, this is where it’s good to look at all the angles of innovation in business.
Uber, Foodora, and Airbnb shook up their respective industries. They applied smartphone innovation to delivery methods in the taxi, food delivery, and hotel industry. They didn’t kill off the older part of their industries. But, they did significantly change their industries while carving out their own niches.
You can look for niches with innovation by creatively mashing up innovations. You can brainstorm innovations of all sorts. From delivery methods to business models to style trends, think about how an innovation in one area can apply to another.
Marketing and consulting legend Jay Abraham has made millions with this method. Outlined in more detail in his famous Strategy of Preeminence.
Ask yourself, does this innovation provide some benefit to a different industry or its customers – for example – by making service more efficient, saving costs, or by tapping into a different market with different tastes?
Not Every Market Niche is Profitable
Be careful not to go overboard when looking for niches.
Your friend Phil might complain all the time about how he can’t get this one specific type of part to finish his Rube Goldberg machine, but that’s an incredibly small niche to fill. Your friend Phil can’t be your only customer if you want to be profitable.
Not everyone is a potential customer. Some people never adopt even the most life-changing innovations. There are still millions of people that have never used the internet or a smartphone, never mind all the advanced apps and software on those devices.
With the accelerated advancement of technology, new niche opportunities surface every day in all markets.
It’s only worth developing a market niche when the target consumers or clients also people willing to pay a very high price for the product or service.
When you can find them, high-end niches profit the most, like the supply chain and procurement example mentioned above. Uncovering these highly profitable market niches requires active participation in an already proven market.
On the flip side, when you are seeking to branch into a new industry entirely, finding a market niche where the customers are normal people by looking for wider unmet needs, desires and problems maybe your least risky opportunity to get started.
How do you uncover profitable market niches? Share your tips in the comments below.
The post Market Niches Everywhere, Do You Know How to Look appeared first on Tweak Your Biz.
source https://tweakyourbiz.com/growth/entrepreneurship/market-niche-discovery
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