To Niche or Not Too Niche?

So we've all heard the age old, marketing 101 rule of business: "pick a niche market". And I know it makes sense, but I've always struggled to understand this advice. How do you pick a niche market without backing yourself into a corner? And then becoming so niche that you can't evolve? What happens if the economy turns (cause we know that never happens)... your whole market making sprockets is suddenly disappears? No sprockets needed, what then?

I was discussing this particular dilemma over lunch with colleague/idea collaborator Matt Cornell and finally was able to make some sense of the niche market dilemma. As you might imagine, it's almost a contradiction... my ideal marketing strategy is to go both broad and narrow. Broad and narrow? How could this be?

Well the easiest way to explain is to show, with my favorite diagram model -- the 2x2 grid. In this grid, the X plane represents the Audience/Consumer, and the Y plane represents the marketing Focus.

1. Kitchen Sink

Focus is Broad, Audience is Broad. The result is the kitchen sink metaphor. A product that tries do everything and wants to be all things to all people. Microsoft immediately came to mind.

2. Private Habitat

Focus is broad, Audience is Narrow. Few people would use this product but it does a lot of stuff for a very small audience. Its hard for this type of product to be really strong because the user base is too narrow and will have different needs.

3. Labor of Love

Focus is Narrow, Audience is Narrow. Only you (and maybe a few like-minded friends) will use this product. You do it because you love it and don't care what anyone else thinks. And, hey that's okay, as long as you don't want to sell it. (This scenario is the least scalable.)

4. The Laser

Focus is Narrow, Audience is Broad. You create a product with laser-like purpose serving a specific need for a wide audience (Fortune 5,000,000). This is how new markets are created and is a highly scalable model.

Though seemingly a contradiction, the Laser allows you to be both broad and niche. It provides a solid foundation for growth, allowing both strength and flexibility.

Comments

[Matthew Cornell]

Great write-up of what we talked about, Liza. Be. The. Laser. You might enjoy "Focus like a laser beam" by Lisa Haneberg. Also, this can bring families closer together: Austin Powers goldmember - sharks with laser beam: http://www.youtube.com/watch?v=Nh5Lh-tTSZQ

[Liza Cunningham]

Tim Sanders writes an interesting post on this same idea of niche markets...

http://sanderssays.typepad.com/sanders_says/2008/06/get-into-the-on.html