Niche Positioning: Three Reasons Why Smaller Can Be Better

When companies or individuals invest money in a new venture, they generally don't want to shoot small with their market positioning, out of fear that they won't be able to attract enough business by marketing to just one niche segment within their chosen market.

Indeed, many companies take comfort in the fact that by striving for a market position that has wide appeal, they'll only need to capture a small percentage share to be profitable. ("All we need is 5% of the market! Let's roll out the advertising!")

What they don't realize is that even a small share can be remarkably difficult to obtain with a new offering in a highly competitive market. A "shoot for the middle" strategy ignores that there are already plenty of competitors fighting over existing market positions within the core of the market, including common positions such as "low price provider," "best-in-class service" and so on.

By owning an identifiable market position or niche that may appear to be on the fringes of the market, you may greatly improve your chances for survival and success. Your offering will be well aligned with the needs of at least some of the people in the market, as opposed to an offering that is designed to appeal to everybody, but does so only mildly.

So the next time your company (or your client) begins to yield to the temptation of shooting for everybody as their target market for a new product or service, think about these three compelling reasons to shoot small.

1. You are more likely to have an impact

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Geoff Dillon is a Toronto-based marketing communications professional. You can reach him at geoffdillon@geoffdillon.ca or via his blog, The Marketing Blender, (www.geoffdillon.typepad.com).