What is a Niche Market?

A niche market is the subset of a broader market on which a specific product is focusing. Therefore, the niche market itself helps to define the product’s specific features which are aimed at satisfying the specific market needs. A niche market can also have its own pricing schedule, production quality and distribution, and demographic range that the product is intended to impact. 

An excellent example of this is entrepreneur Kurt Daems. He discovered that construction crews and factory workers were avoiding wearing safety glasses because they were unattractive and made the wearer “look funny.” He invented a new type of safety glass that appears more like regular beach sunglasses than safety glasses. 

In short, Daems created a niche market (cool-looking safety glasses) in a broader market (the need for workplace eye protection). The test for an entrepreneur is to survive among the competition from numerous giant companies selling similar products, but not the niche market product. 

In practice, product vendors are commonly referred as “narrow demographics niche market providers” (shortened to niche market providers). Investors and small venture capitalist usually select a niche market with narrow demographics as a tool for increasing their margin gains.

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