06 Sep 09 Niche: What is it?

If you are searching on the internet about ways to make money, one thing must have been popping up every now, and then even from the unexpected quarters, and that thing is the word “niche”. In this article, I will attempt to describe what is niche.

What is a niche?

A niche is a small fragment of a fragment of a large homogenous market comprising of individuals with more or less similar need.

Sounds good! But how is it different from a market segment?

Well, the only difference between a niche and a market segment is the size. A segment is a part of the whole market, but a niche is a part of a segment.

Let’s understand it by an example, and for this purpose we will take a cold beverage market.

In the beginning there was just one cold beverage available to quench our thirst and that trustworthy beverage was water, and then came juices, then colas, then powder concentrate and then what not. Hence, the cold beverage market get formed and divided into different segments.

Different segments of cold beverages market:

Water
Carbonated soft drink (cola)
Juice
Pulp juice
Nectar
Soft drink concentrate
Powdered soft drink concentrates
Heath and energy drink, etc.

Now let’s take any one segment, say “health and energy drink” and try to understand what a niche is. As we talked earlier, a niche is nothing but a subdivision of a segment, so what niches will fall in the purview health and energy drink market?

Different niches of health and energy drink segment:

Energy drink for athletes (Gatorade, PowerAde, etc.)
Energy drink for office goers
Health drink for physically sick people, etc.

Now one more term comes to bother us, and that is micro niche.

After all, what is micro niche?

Well, micro niche is nothing, but a subdivision of niches. Let’s take “energy drink for athletes” niche from the above example, and try to find micro niches within that niche