Someone once told me there are 13,000 wood carvers in Bali. Or maybe it was 32,000. Naturally I believed her because that’s what we do when someone tells us something, right?
Whatever the number, there are an awful lot of them and some of them really are awful. They put out shoddy long-legged giraffes and cats that even a coat of paint offers no improvement. Needless to say, they get very little money for them. But some of the carvers produce work that is truly exquisite. They are bold, imaginative works of art that optimize the grain and flow of the original timber. Some of these pieces rightly fetch thousands of dollars.
Then there are people who make a living from the carvers. I once lived next to a comfortably-rich family that specialized in taking ordinary-looking pieces and embellishing them with paint, cloth and baubles. They sold these reworked pieces at much more than the original cost. There are also agents who take the raw giraffe at a few cents, add a coat of paint, and sell it at the local market or the airport for 10 times the original price.
All these business people have customers who are their target market, and they are filling a particular customer need. If wood carving is a niche (there are also stone masons and bone carvers supplying the same target market) then the latter two examples are niches within a niche.
You often read about the importance of niche marketing in the business press, especially if you are a small business. But one should also consider the size of your market. It’s pretty hard to maintain a successful niche of ballet shoes in certain countries—no matter how great your product is or how passionate you are about it. Why? Because your target market is simply too small. Whether it’s a country town in the Western world or a village in an undeveloped country, the corner store is still a general provider of people’s needs. Its local niche is that it isn’t usually the fuel supplier or the doctor. However, demographics are changing this type of traditional store today. The city and its diversity are now the draw card; not to mention the internet.
So a key element in defining your niche is being savvy about the critical mass of buyers to whom you need to make your product viable. This is the number of buyers you need to ensure your product takes off.
As a customer base grows and people’s incomes rise, opportunities for niche markets also grow; and some of them are bizarre.
Note this recent conversation:
“My local construction company is making lots of money, they are always so busy!”
“That’s good.”“They are helping convert rice fields into villas”.
“That’s bad.”“They are now upgrading their equipment with a fleet of wheel-barrows in lieu of buckets, to increase their productivity.”
“That’s good (especially for the niche seller of wheel-barrows).”
“They are showing signs of increasing lower back pain.” “That’s bad.”
“This will create a new niche opportunity for a specialist in lower back pain.”
What are the Benefits of being a Niche Player?
● You can focus on one set of customer experiences that you can excel at
● You and your staff can build a stronger set of core capabilities
● You can be more enthusiastic and passionate in selling your product or service
● Your marketing can be more strategic and more focused
● You are likely to need only one processing system, resulting in a simpler business structure
● You generally have less outlay in inventory and fittings
When you consider your own niche opportunities, your capabilities should be a primary concern. It’s your capabilities that ultimately define the quality of your product or service. Capabilities go with the other resources you are providing (along with your products and other partner resources if any) to provide a crafted offering that helps your customers meet their needs. Are you providing VALUE to your customers with this offering?
Carving out a niche is an essential component to ongoing success and growth. Next time, we will look at this concept from a practical perspective and give you some insight into how you can implement these principles.
CEO and Co-Founder
neXtep Business Builder Community Pte Ltd
Singapore ACRA Business Registration Number: 201424522Z
80 Kitchener Road #09-09/10 Singapore 208539