Guest Blogger: Doug Meacham
First off, I’d like to thank Greg for inviting me to post on his blog while he is visiting the House of the Mouse. Given the reason for Greg’s absence, I considered recycling some of my recent posts regarding the Disney Experience. Then I thought about the great opportunity Greg was giving me to make connections with a new group of readers. Bloggers try to share other engaging content through their blogrolls, but my observation is that most blogs tend to be “niche” media offering unique content to a relatively small set of regular readers. With that thought in mind, I though I would share some thoughts on Niche Marketing.
A June 2007 article in Advertising Age suggested that the maturing marketplace, combined with the hyper-connected, in-control consumer “has created a seismic shift from one-size-fits-all mass markets to millions of markets of self interest.” That assessment carries huge implications for retailers who are trying to move product that was once a specialty, but is now a commodity. Strategy consultants Booz Allen Hamilton explain it this way:
“As every market matures, choice increases. Then competition drives up quality and convenience to the point at which offerings become commoditized. The only businesses that then thrive are those that move beyond “me-too” or incremental offerings to marketing more-relevant and more-differentiated products and services. The only way to accomplish this is to focus on a narrower target.”
Technology and the Long Tail
Technology has played a major role in facilitating this shift. Marketers are now able to micro-target specific groups, engage customers with more frequency and intimacy, and customize to consumer specs. Moreover, technology has enabled consumers with the tools to seek out suppliers that offer just the thing they want.
Think about it. If you are a retailer focused on selling lots of stuff to lots of very different people, you are probably fighting a loosing war of diminishing margins, market share and profitability. On the other hand, brands and marketers that have figured out how to excel at attracting and keeping loyal a narrowly focused niche will probably continue to do well. And why is that? Once you, the customer, have experienced having your ever-increasing levels of self-interests met by a niche provider, you have a hard time going back. For example, if I am an amateur chef (I’m not), I would not bother shopping a mass merchant or local super market chain for those hard to find, must have items that I know I can get at a specialty cooking store or a local butcher.
That’s not to say that the mass merchants don’t see this trend. As even a senior Wal-Mart official recently said,
“no customer today will stand to be treated as part of a mass market anymore.”
This is a major disruption and marketers who fail to respond to it quickly will suffer. According to Advertising Age, the value propositions of those who ignore niche marketing…
“…will be less relevant than those of competitors. For those slow to adopt niche marketing, the future also is bleak. Attempts to recoup share will be difficult because competitors will have preemptively established closer customer relationships."
A number of brands and marketers have embraced niche marketing. Names like Target, Sur la Table, Red Bull and American Girl. They all have the same objectives as any other marketer, but they have sensed the disruption and have responded by finding a new way of going to market.
Narrow, Not Small
The other thing that has changed is what niche marketing really means in today’s environment. It still means targeting a more narrowly defined customer group seeking a distinctive mix of benefits, but niche markets are not the “marginal opportunity” that they were once viewed to be. Today, niches are viewed much more positively.
In today’s marketplace, niches are flourishing. Some niche brands are generating hundreds of millions in sales. Sometimes, narrow niches, fueled by mavens and connectors, become the next big, disruptive thing. The point is that niches should not be equated with small. Instead, think narrow. Then target very specific groups who will relate to and find differentiation in your offering. At this point, you are no longer a commodity and you can increase your margins by charging a premium. Do this over and over with different products and services, and you can generate volume and growth that makes up for your narrow targets.
Smaller Targets, Larger Focus
Marketing is a highly dynamic and fluid thing. It has to be because the marketplace is constantly changing. Empowered by technology, today’s consumers are very different from what they were just ten years ago. Successful brands and marketers have recognized this shift and have adapted their strategies and tactics in response. Focusing on the 4P’s — product, pricing, place, promotion no longer works. Other recent marketing tactics such as customer-relationship marketing and digital marketing have been applied, but absent any real strategic purpose, they too can be ineffective.
So what’s really new about the new niche marketing? Advertising Age says “it’s realizing that while our targets have to narrow, our definition of marketing communications has to broaden. Today, everything communicates what a brand stands for, all the time.”
The Advertising Age article listed 10 principles to harness the power of niche marketing which are worth repeating:
- Position your brand as narrowly as is economically possible.
- Become the specialist that anticipates the needs of your target.
- Rapidly work with the target niche to co-innovate.
- Set as your goal such consumer centricity that the target niche will want to co-brand their identity with yours.
- Live by a higher standard of ethics.
- Embrace a business model and metrics that grow the most valuable assets of the new niched economy.
- Reap first-mover advantage by learning how to identify a niche of opportunity.
- Re-imagine your role as that of entrepreneurial founder of a special interest group.
- Forget push marketing; excel at pull marketing.
- Realize your brand is now “media” competing against all other media
What do you think? Does this make sense to you? Can you think of companies that could immediately benefit from leveraging niche marketing? If you are a retailer, are you losing customers to niche marketers? If so, what are you doing about it?

