How to find a market niche? A handful of proven tips

Understanding Marketing Research
How to find a market niche? Market research

The term "market niche" typically refers to a narrow group of consumers with unique and often unmet needs. Focusing on niche markets comes with various benefits and opportunities, including:

  • Lower competition: This facilitates easier market domination, especially if the entity is the first supplier in the niche market, allowing for rapid development and cost-effective promotion of products/services.
  • Lower capital requirements: Due to the small size of the niche, less capital is needed to start operations.
  • Higher profitability: Reduced competition and unique niche needs enable departure from price competition and the application of higher profit margins.
  • Greater specialization: Focusing activities and resources on specific areas.
  • More efficient logistics: The small size of the niche makes it easier to create distribution and purchasing channels within it.

However, utilizing niche markets may also involve certain risks or negative consequences. Exploring new areas often requires thorough (and often costly) understanding. Additionally, niche markets may lack entry barriers, posing a risk of significant competition in a very narrow market segment. The chosen market niche may also prove to be unattractive for entrepreneurial activities.


How to find a market niche?

Identifying market niches generally involves pinpointing unmet needs. It is believed that the need to solve a specific problem is a stronger emotion than the desire to possess a certain good. Identifying a market niche through consumer needs is often done by:

  • Identifying a market niche by recognizing a group of consumers whose needs are unmet despite existing offerings in the market. This method of finding niches, considered the most commonly used, is usually based on the characteristics of the market segment from which the niche originates (territorial reach, customer groups, assortment, innovations).
  • Complementing a market niche by supplementing already satisfied needs through observation of the purchasing behaviors of existing customers. This can be done by expanding the range of products with an additional service, complementing a offered item with free information, or improving products by giving them properties desired by consumers.
  • Creating a market niche, understood as creating an entirely new market, for example, by creating new articles or influencing changes in consumer preferences.


Enter here: Understanding marketing research


The directions for finding the optimal market niche are linked to consumer needs. They inspire the discovery of areas of the market that have not yet been exploited or have been only marginally exploited, without utilizing their true potential. If you operate in a market and have some knowledge about it, often you can independently find business inspiration or even identify "niche" areas. This can be done, for example, by:

  • Independently searching for problems to solve in your own environment (at home, in the immediate vicinity, at work, in the region).
  • Observing and adapting innovative solutions, meaning finding inspiration in other (also foreign) markets and transferring them to the already occupied market.
  • Improving existing solutions to observed problems - such actions are somewhat entering an existing market and are often referred to as the "red ocean strategy."
  • Internet monitoring - internet forums, social media platforms, or suggestions from search engines (e.g., for the phrase "How to get rid of...") are a rich source of knowledge about problems/needs, many of which may turn out to be niche.
  • Perfecting your passions and interests - passions and interests contribute to developing specialized knowledge (which is always needed in business activities) and allow you to identify potential, often specific, product/service gaps in the region in this particular area.
  • Analysis of business experiences - it is believed that every job hides a certain niche potential; therefore, previous professional experiences contribute to searching for specific problems/needs (operating in a known area also increases the chances of success).
  • Identifying defects and shortcomings in products/services - improving errors and imperfections in existing market offerings (this is the so-called "blue ocean strategy").
  • Service individualization - in a mass-market satisfying needs in a personalized way, it is worth considering raising the price for the product while simultaneously personalizing it and better adapting it to the needs of the buyer(s).
  • Adapting existing products to new target groups - a set of activities aimed at expanding the product range to other target groups. For example, the individual/business market has a dedicated and appropriate range of products - these items can be transferred between markets, ultimately providing an opportunity to find new niches.


Determining potential market niches requires an analysis of their profitability - the potential of the market niche, the willingness of consumers to purchase products, and ultimately the profitability of entering a given niche market.


- It is not enough just to find a niche, but also to find out how to develop it. The starting point seems to be the identification of a consumer need. In the next step, we should find out how to satisfy it. In this case, we use qualitative research more often, as it allows us to specify those elements which are often surprising at the initial stage of work - explains Dr Monika Jaremków - R&D Director at Biostat Research and Development Centre.


Market research

Independently discovering niches within an already occupied market can be risky and, in some cases, costly and time-consuming. Therefore, among the recommended methods for identifying undeveloped market areas, professional market research should also be included. Furthermore, if the determination of the niche is to take place within a market where products/services are already sold, it is advisable to focus such research on that specific market. It is also necessary to supplement them with an understanding of customer opinions about the already existing product offer. This allows gathering a broad spectrum of essential business information under one cost.


Market research (including marketing research), whose goal is to identify undeveloped market areas, should focus particularly on answering questions such as:

  • Do consumers perceive market gaps that require filling?
  • What is missing for consumers in existing products/services?
  • What are the biggest problems for customers, what do they need help with, and what do they want to change?
  • How do consumers use currently offered products, and what would they suggest changing regarding the service?
  • How high is the interest in a particular market niche?
  • How can consumers entering a particular market niche be characterized?


Useful for obtaining answers to these questions may be the analysis of existing market data (Desk Research), quantitative research (e.g., CATI telephone surveys, CAWI electronic surveys), or qualitative research (e.g., IDI and FGI interviews) - allowing for a deepening of already obtained indications and developing research tools for quantitative measurements during the step-by-step implementation of the study.


See also

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Frequently asked questions

What benefits can result from conducting market research aimed at finding a market niche?

Benefits may include lower competition, higher profitability, focused specialization, more efficient logistics, and the ability to adapt products and services to the unique needs of niche consumer groups.


How can quantitative research contribute to identifying potential market niches?

Quantitative research, such as online surveys, can provide statistical data on consumer preferences and needs, allowing the identification of areas with niche potential.


Does conducting market research to find niches involve additional costs, and why is it worth investing in this activity?

Yes, conducting market research involves additional costs, but this investment is justified because it enables a precise understanding of the market, identification of niche areas, and directing marketing activities towards specific consumer groups.


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