Sometimes competition is a good thing because, it carves out the right opening for a niche market. If your business is small and your operational ability can’t match that of competition you need not be sad, discouraged or disgruntled, study the market and you’ll identify a niche.
What is niching?
Market Niche: A market niche seeks to dominate a small part of the overall market where it does business. Market niches are typically smaller players and smaller companies that can’t effectively compete against the market leader but can succeed in a specific area and with a specific audience by focusing on a specific differentiator aligned with the niche.
Niching is only one of four competitive marketing positions which include: the market leader, the challenger, the follower and the market niche. These are explained in detail below
Market Leader: The market leader is exactly what the name says — the leader of the market where the brand exists. It’s important to point out that the market leader isn’t necessarily the first-to-market. Those are pioneer brands, and they can be surpassed by other brands that enter the market later and steal the market leader position.
Market Challenger: A market challenger wants to aggressively steal market share from the market leader, and invests time and money into finding differentiators and creating marketing programs that enable the brand to exploit opportunities whenever they arise. And if opportunities don’t arise, the market challenger will seek ways to create innovative opportunities. The classic example is the ongoing Coke vs. Pepsi rivalry.
Market Follower: A market follower seeks to gain market share but is less interested in differentiating its brand from the market leader. Instead, the market follower effectively rides on the market leader’s coattails while positioning its brand just far enough away from the market leader to be different. A great example is any young adult novel that’s marketed as “the next Harry Potter.”
Note: the are four roles and not four companies, there could be as many as 20 companies in an industry but they all fit organically in these four roles. Another point of salience is the fact that not all four roles must be exercised, you can have a leader, a challenger and nicher depending on that industries situation
A good example is Smirnoff ice…
Smirnoff falls under the RTD (ready to drink alcohol category), it came into the market in 2008. The market was clustered with stouts, lagers and soft drinks and water. Before Smirnoff’s arrival the above categories occupied 98.61% of the market share (source Guinness Cameroon SA). A market share is the territory (not necessarily geographical) a product occupies in the market, this is mostly measured by volume of sales. This implies that drinks in the lager, stout and soft drinks category dominated the market interms of sales volume. The question you must be asking is, how Smirnoff survived in such a cluttered market. The answer, Smirnoff created a niche.
How did Smirnoff create a niche?
Women had many problems with the orthodox “beer” bottle. The presence of corn gave them big bellies like their male counterparts, the bitter and sour tastes of some of the “beers” made a difficult swallow for some women, the bottles were often too big for their relatively feminine hands and the large volume of most drinks made the drinking experience fraught with too many toilet breaks.
Did Smirnoff solve these problems? Yes and much more, they brought a smaller bottle, with a transparent drink and sweet taste, the red color of the label is appealing to women, a lot like their lipstick, and the absence of corn made women not to panic about their waste lines.
Today the Smirnoff ice product thrives in the market as it has become the lady’s choice. This is a strategy you can apply to your own business.
Make sure to leave a comment on our Facebook page in case of any questions, qualms or quarrels.