Finding Profits in Niche Markets

Potential niches include growing and selling crops such as okra to cater to the needs of ethnic customers. (Photo Credit: bhamsandwich via Compfight)

Potential niches include growing and selling crops such as okra to cater to the needs of ethnic customers. (Photo Credit: bhamsandwich via Compfight)

From a distance, a forest appears to be a mass of green. But draw near, and it is possible to see differences. Closer still, you can begin to make out individual trees and eventually, specific forest niches – trees, shrubs, flowers and grasses. Each of these niches has their own special needs and conditions to be able to not only survive, but thrive.

Like the forest environment, the marketplace is not monolithic. From a distance the market may look like a vast sea of consumers, but as you zoom in and drill down, you begin to see many unique customer needs that were not visible from a macro vantage point.

Some customers buy food once a month, others once a week or once a day. Many prefer the social interaction of the grocery store, while increasingly more are choosing an online approach, which means shopping from the comfort and convenience of home. These options are over and above what many consider the most traditional considerations: price and quality. Look harder and you’ll see consumers demanding local, vegan, gluten-free, and organic foods, to name just a few of the current culinary requests.

The fact is, savvy producers are ready to deliver on these, capitalizing on markets that would otherwise go un-served. Examples include: marketing pasteurized goat milk to consumers allergic to cow’s milk; developing locally produced organic and gluten-free products for customers with dietary restrictions; growing and selling crops such as okra, cilantro, and ginger that cater to the specific needs of ethnic customers.

A market niche is where customers of common interests, needs and wants congregate. For vendors, that’s pure gold – it means being able to target and focus marketing efforts to the people most likely to buy your products. You need to be in a niche.

Developing a niche market

“Opportunity is missed by most people because it is dressed in overalls and looks like hard work.” So goes an old adage, often attributed to Thomas Edison, the famed American inventor.

Like opportunity, under-serviced market niches are everywhere because many producers opt for the ‘shotgun approach’ to marketing and are not willing to put additional effort into developing a niche market.

Clever niche marketers discover those opportunities, position themselves as the authority in a niche, and win customer loyalty. The secret, if there is one, is simply to give customers what they want, and do it so well that they don’t even think about your competitors.

Smart farmers have been able to define a market niche that works and know their customers well enough to supply exactly what they demand. Despite advice to the contrary, by putting all their (proverbial) eggs in one basket and focusing on making that basket as good as it gets, they have learned to refine, define, brand and target their products and services to a specific market niche.

Tips to define and master your niche

  • Start small!
  • Manage risk and develop your ability to grow and market new products before you scale up.
  • Don’t try to be everything to everyone. A uniform marketing approach will not work because there are too many different needs and too many different niches.
  • Specializing in a niche doesn’t mean abandoning other crops. It also doesn’t mean choosing only one niche; it just means getting really good at one thing and making sure that the product reaches the consumers who need it most.
  • Talk to buyers, do some market research and be sure that what you are growing will continue to be what your niche will want. Many growers go by what sold well last year but most specialty buyers, including chefs, are constantly looking for something new.
  • Look for ways to differentiate your product not only by what you grow, but how you grow it or how you package and market it.
  • Visit farms and talk to farmers within your region to get a sense of what is already being produced and what remains untapped. Go to gourmet food stores and local food cooperatives to get new ideas.
  • Focus on developing one niche at a time. Once you are well established in one, move to another. Going after too many niches at the same time will not only drive you bonkers, but will diminish your brand strength and wear you out.

When your focus is narrowed on the needs of a target market niche and, you do what it takes to win those customers, you will find the profits hidden in the market niches.

An environmental horticulturalist and business management consultant, R. Gary Morton works with farm-based clients to develop value-added opportunities, products, strategies and experiences.

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