Niche Strategy

Published by MBA Skool Team, Last Updated: January 22, 2018

What is Niche Strategy?

Niche marketing strategy is a focused marketing plan unlike the ‘target everybody’ strategy. It targets only those customers who can relate well to the product/service. The company tries to build the long term relationship with these small set of customers. Some people falsely believe that the profitability and success is directly dependent on the number of potential customers targeted.

However, there are few things which need to be considered for implementing the niche strategy:

1) Unique Needs: The customers in the niche segment should have needs that are different from their general needs

2) Market Size: The market size of the niche segment should be sufficient to support the business and ensure profitability

3) Competition: Although the business is targeting niche segments, but there would be competitors there too. The product should have some point of differentiation for the consumers

4) Communication: It is very important to identify the correct niche segment and communicate effectively with them

This strategy is especially useful for the small companies with a limited budget and specialised products. But even large companies with mass products can make use of this strategy to target niche segments. Companies focus on the customers based on their demographics, interests, occupation or social causes. Once the target group has been identified, a marketing strategy can be developed. Some of the strategies that can work well here are word of mouth campaigns, endorsement campaigns and targeted collateral campaigns. The companies can also target high margins by providing specialised services

For example: Toyota, a large car manufacturer, often uses niche marketing strategies. Toyota launched Prius, which targeted environment friendly customers. It also targeted the media (environmental groups and their publications) that mainly targeted the people concerned about the environment


This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

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