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Is “Niche” Really a Strategy?

Some marketing strategists argue that there are only three strategies: go head-to-head with competitors, target a differentiable niche, or change the game. We disagree. There are really only two – at least if you want to win.

So you have identified an underserved segment of a broader market and plan to attack it. You’ve read the strategists that tell you that targeting a niche can be a way to win. I don’t argue. But let me suggest that before you commit resources you might want to ask yourself why this niche is underserved. Maybe competitors already checked it out and decided there was no compelling case for targeting it. Maybe competitors are already there but doing a lousy job. Maybe the niche has unique needs and no one before you has figured out how to satisfy them. Or maybe everyone else has been asleep at the wheel and failed to recognize a real opportunity. Whatever the case, it’s always best to assume competitors are smart, so if you’re doing something they’re not, try to understand why.

Let’s assume you’ve done your due diligence, and you are still attracted to the niche. Now consider scenarios. Scenario 1: one of your competitors already occupies your niche but your research shows a high level of customer dissatisfaction. In that case, the same rules apply as with any market – you either need to attack with clear competitive advantage (better product, deeper pockets, superior value) or else change the game to disadvantage the incumbent (redefine the value proposition, open a new segment, enlist allies in a unique platform). Any other approach is either stupid or gambling.

Scenario 2: there is no competitor, and you will be the first market entrant. What now? Again, there are only two broad possibilities:

  • Competitors follow
  • Competitors don’t follow

If they don’t follow, it might be because you have created an overwhelming advantage in the niche. If so, congrats! You are studly and may reap huge rewards. But if you are not a particularly intimidating competitor and no one cares to come after you, beware. Either you are kidding yourself about the potential of your niche, or else competitors are biding their time until they can crush you with overwhelming advantage or a game changer.

Because some laws are inviolable and this is one: if someone is making money somewhere, someone else will eventually want a slice of the pie.

Bottom line: to win in a niche, you either need to beat competitors or be prepared to defend against them. Can anyone please explain how that is different from any other market? If not, let’s agree that a niche is simply a market by another name. It may be smaller than the overall market, but the same rules apply.

Targeting a niche can be a fine opening gambit, but it is clearly not a differentiable strategy.  Now, can we stop discussing niche marketing as something other than … marketing?

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