Market niche

A market niche (also niche market ) is a sub-area of ​​the overall market ( sub-market , market segment ), the range of which is not yet or only insufficiently provided by current competitors .

General

The reverse of the word is the niche market , a market with at least one market niche. The market niche presupposes that there is demand that a relevant market either cannot or can only insufficiently satisfy. Potential buyers can be found in a market niche, but only a few providers. The market volume is rather small in market niches, so that there is a narrow market breadth; however, high profit margins can be achieved for the entrepreneur .

Business administration

Concept development

The word niche is borrowed from the old French word for "building a nest" ( French nichier ). The business term of the market niche was borrowed from the ecological niche that Charles Darwin introduced in 1859 as part of his theory of evolution . In 1917 Joseph Grinnell used the term in the sense of a spatial niche. In the economics of the niche concept reached in particular by on Joseph Schumpeter constructive evolutionary economics (also: Evolutionary Economics ). The market psychology took the niche in 1961 by Bernt Spiegel on. He dealt extensively with the market niche and transferred the ecological niche concept to the market niche model.

content

Market niches are part of strategic management, as is market cultivation of the overall market. In Michael E. Porter's competition matrix , the niche strategy ( English focus ) appears as a strategic concentration on certain customer groups, segments or geographic markets. In contrast to the overall market, niches can only be found in a sub-market or in a market segment. Some authors see the market niche as a submarket in which a certain product is not offered or in demand, although it is present in the other submarkets.

A distinction is made according to buyer behavior :

• Manifest market niches ( precompetitive niches ): are visible and easily traceable niches for which there is no offer yet. Potential buyers therefore completely forego a purchase. The manifest niche can only be closed through new offerings. Base niches are any resource space in which an organization could carry out its activities productively.
• Latent market niches ( post-competitive niches ): appear as inadequate supply such as supply gaps and only reveal themselves when a new product tailored to the niche requirement appears. Potential buyers are turning to substitute goods . There are no areas with customers whose needs are not met.

Market niches require a high and flexible product differentiation on the part of the provider, they also require specialization such as concentration on certain target groups or products .

marketing

The marketing has developed numerous modifications of the term as "niche market", "niche", "niche demand" or "niche strategy". Providers with a niche strategy target a specific sub-market. It should be noted, however, that not every supply gap can represent a market niche; this also applies to excess demand .

It is the task of market cultivation to identify market niches. There are the following marketing strategies :

Undifferentiated marketing strategy	Concentrated marketing strategy	Differentiated marketing strategy
Mass market uniform offer for all consumers	Niche market special offer for a target group	Class market special offers for different target groups

In order to track down market niches, providers use market analysis , market observation and market research .

Market niches are an indication of market potential . When concentrating on a market niche, both price leadership and quality leadership are possible.

Market psychology

Bernt Spiegel's psychological market model describes and explains the structure of the distribution of opinions on an object of opinion (e.g. a product) in a social field. Niches prevent that

"... the individuals cluster at one point in the biotope and ultimately suffer from a shortage, while other areas are only used to an insufficient extent."

If, for example, an object of opinion is to be positioned, then one would like to do this in the experience space, i.e. in the personal world of a customer (consumer). The basic assumption is that an image does not consist of subjective and objective reality, but of objective conditions that are contained in a subjective image. This means that not only the objective conditions are decisive for an image, but above all the psychological environment, the social characteristics. The image is the consumer perception of a product and is jointly responsible for the placement of an object of opinion (product) in the social field.

Positioning the subject of opinion in the social field

Person categories:

• Uninformed: people who do not know the object of opinion (e.g. the product),
• Informed: People who know the subject of the opinion:
  • pendant
  • Undecided
  • Rejecters.

With this model, the location of an item of opinion can be determined by the location of its spontaneous supporters and rejecters. The positioning of all market participants is in turn dependent on the dimensions of the field, which are determined by polar pairs of characteristics. Such opposites are, for example, high and low social status , respect for form and color, young and old, willing to make contracts and shy of contact, sentimental or unsentimental. This illustration is intended to make it clear that one is first forced to think about the pairs of characteristics that are responsible for the position of the opinion item on the market. It is the task of the market strategists to create a good image for the product or to improve it.

According to Spiegel, the number of supporters of a certain item of opinion can also be increased through various measures:

• Informing the uninformed : if the subject of opinion is positioned close enough to them, they will usually become supporters. But it can also happen that they switch to the rejecters.
• Shift in the subject of opinion : Shift in the direction of the undecided or the rejecters; here, however, there is a risk of losing followers.
• Shifting people : influencing expectations and desires in the direction of what is offered by the object of opinion (subjectively).
• Increase in the basic prompt value : e.g. B. through community advertising; this can also benefit all other objects of opinion in the social field that represent competition.
• Increase in the additional solicitation value : (Additional solicitation value of a brand is the additional solicitation value that exceeds the need). In order to increase the additional challenge value, the position must be strengthened, for example through targeted advertising or a conscious naming of the brand.
• Postponement of competition : e.g. B. by shaking the credibility of competitors; move to areas with less densely populated areas and reduce the additional prompting value of competing objects of opinion.

Multi-dimensional representation

In market, advertising and media research , the nature of a request, i.e. the properties of a goal to trigger an action, is the ability of a product, advertising material, advertising medium, design, etc. to inspire a buyer for a product, to encourage them to buy or to create a product loyalty build up. The prompting character depends on the prompting gradient:

${\displaystyle \tan \alpha =B+W/D=H/D}$

The prompt gradient, mathematically the tangent of the angle α ( ), represents the relationship between the prompt level and the distance of the consumer from the opinion gradient (product ). The prompt level is made up of the need of the person and the additional prompt value of the object . The prompt gradient becomes large when the distance between consumer and product is small and / or the prompt level of the product is high. According to Spiegel, α must be as large as possible so that the product comes close to the consumer and is attractive to him. ${\displaystyle \tan \alpha }$ ${\displaystyle H}$ ${\displaystyle D}$ ${\displaystyle K}$ ${\displaystyle P}$ ${\displaystyle H}$ ${\displaystyle B}$ ${\displaystyle W}$ ${\displaystyle E}$ ${\displaystyle P}$ ${\displaystyle H}$

Gap in the market

Porter understands a market niche to be a specific target group, a specific part of the production program or a specific geographically delimited sub-market, whereby the demand is usually extremely stable. On the other hand, there is a gap in the market (in marketing jargon: English opportunity ) if there is no product at all for a need , for example if a product is offered abroad , but not domestically . Some authors like Wolfgang Koschnick see the two terms as synonyms. The transport insurance introduced by Carl Thieme in 1880 closed a market niche that had existed until then, because it was only offered abroad.

economic aspects

A company is only interested in supplying a niche market if it can overcome the market barriers and its product or service can exceed the product-related break- even point . If there is a demand, it can possibly act as a quantity fixer and set the market price profitably.

Recognizing a market niche and persistently pursuing to close it can be of decisive importance for business success, as pioneering profits or a quasi- monopoly can be created. Market niches and thus the companies working from the perspective of the supply point of view (niche competitors, niche providers) are said to have high profitability . In contrast to generalists, niche competitors realize their competitive advantages through specialization , individualization and concentration .

Niche items emerge as products that - far from the mainstream - fill market niches. Typical examples are: slow-moving items, items of only individual or regional interest, collectibles and consumables that do not correspond to the current zeitgeist, technically outdated products, including refurbished items. Numerous web shops deal with the sale of niche products and thus enrich the market offer in a variety of ways.

Products or services do not always have to remain in one type of market, but can also change. The prerequisites are a very high market potential , which enables a larger market volume , and a decreasing price level , which generates more groups of buyers . Almost every mass market started out as a niche market, but not every niche market becomes a mass market. The personal computer began with the Apple I , which was ready for the market in April 1976 and initially had a small market volume in the niche market. The PC not only filled the gap in the market for medium-sized data technology in companies, but also conquered private households . Its rapidly increasing mass production led to price reductions that made the PC affordable even for lower-income groups of buyers.

See also

• U-curve by Michael E. Porter
• Competitive advantage
• Market segmentation
• Market definition
• Product differentiation
• Economies of scale
• the long tail
• Composite effect

literature

• Marc Danner: Strategic niche management. Creation and processing of market niches. Deutscher Universitäts-Verlag, Wiesbaden 2002, ISBN 3-8244-7753-X (also dissertation: University of Gießen 2002).
• Kerstin Friedrich: Success through specialization. (Develop skills, expand core businesses, overtake competition). Redline Wirtschaft at Verlag Moderne Industrie, Munich 2003, ISBN 3-478-85520-9 .
• Robert E. Linneman, John L. Stanton: Niche Marketing. Campus-Verlag, Frankfurt am Main u. a. 1992, ISBN 3-593-34734-2 .
• Richard R. Nelson , Sidney G. Winter : An Evolutionary Theory of Economic Change. Belknap Press of Harvard University Press, Cambridge MA a. a. 1982, ISBN 0-674-27227-7 .
• Sylvia Nickel: Successful in the niche. How you can beat the competition as a lean provider. Cornelsen, Berlin 2005, ISBN 3-589-23693-0 .
• Michael Rosenbaum, Melanie Monßen: Niche factor . Success through specialization. Handelsblatt publishing group, Düsseldorf 2004, ISBN 3-7754-0206-3 .
• Max W. Twerenbold: Successful in niches. In: Organizer. No. 10, 2004, ISSN  0473-2839 , pp. 6–8, zhaw.ch (PDF; 1.7 MB).

Individual evidence

1. ↑ Dieter Specht / Martin G. Möhrle (eds.), Gabler Lexikon Technologie Management , 2002, p. 179
2. ↑ Günter Wöhe / Ulrich Döring , Introduction to General Business Administration , 25th edition, 2013, p. 383
3. ^ Alfred Kieser, Origin and Change of Organizations , in: Leonhard Bauer / Herbert Maties (eds.), Evolution - Organization - Management, 1989, p. 161 ff.
4. ↑ Joseph Grinnell, Field Test of Theories Concerning Distribution Control , in: The American Naturalist 602, 1917, pp. 115 ff.
5. ↑ Joseph A. Schumpeter , Theory of Economic Development , Duncker and Humblot / Leipzig, 1912 (recte 1911)
6. ↑ Bernt Spiegel, The structure of the distribution of opinions in the social field. The psychological market model , 1961, p. 102 ff.
7. ↑ Bernt Spiegel, Niche - A term from theoretical biology in marketing , in: Thexis, Volume 7, No. 4, 1990, p. 6 ff.
8. ↑ Michael E. Porter, Competitive Strategy: Techniques for analyzing industries and competitors , 1980, pp. 609 ff.
9. ↑ Marc Danner, Strategic Niche Management: Development and Processing of Market Niches , 2002, p. 37
10. ^ Hermann Witte, General Business Administration , 2000, p. 46
11. ↑ Springer Fachmedien Wiesbaden (ed.), Compact Lexicon Economy , 2014, p. 371
12. ↑ Bernt Spiegel, Niche - A term from theoretical biology in marketing , in: Thexis, Volume 7, No. 4, 1990, p. 7
13. ↑ Tobias Schäfers, Consumer behavior in market niches , 2011, p. 35
14. ^ Jan Grasshoff, Niche strategies in credit , 2003, p. 14
15. ↑ Bernt Spiegel, Niche - A term from theoretical biology in marketing , in: Thexis, Volume 7, No. 4, 1990, p. 7
16. ↑ Harry Schröder, BA course , 2019, o. P.
17. ↑ Micha Trachsel, Niche strategies and their importance for corporate success , 2007, p. 199
18. ↑ Michael C. Rosenbaum, Opportunities and Risks of Niche Strategies , 1999, p. 25
19. ↑ Michael C. Rosenbaum, Opportunities and Risks of Niche Strategies , 1999, p. 25
20. ^ Carlo Cavalloni, More courage to market niche , 1999, p. 41
21. ↑ Tobias Schäfers, Consumer behavior in market niches , 2011, p. 40
22. ↑ Tobias Schäfers, Consumer behavior in market niches , 2011, p. 47
23. ↑ Günter Wöhe / Ulrich Döring, Introduction to General Business Administration , 25th edition, 2013, p. 383
24. ↑ Philip Kotler / Kevin Lane Keller, Marketing Management: Strategies for Value-Creating Action , 2006, p. 242
25. ↑ Michael E. Porter, Competitive Strategy , 1999, p. 75
26. ↑ Bernt Spiegel, Niche - A term from theoretical biology in marketing , in: Thexis, Volume 7, No. 4, 1990, p. 6 ff.
27. ↑ Michael E. Porter / Claas van der Linde, Toward a New Conception of the Environment-Competitiveness Relationship , in: Journal of Economic Perspectives 9 (4), 1995, p. 335
28. ^ R Kühn / H Jucken, Positioning gap analysis , in: Thexis No. 4, 1990, p. 12
29. ↑ Wolfgang Koschnick, Management: Enzyklopädisches Lexikon , 1996, p. 398
30. ↑ Christian Stadler / Philip Woldermann, Die Jahrhundert-Champions , 2012, p. 51
31. ↑ Holger W. Winkler, Online trade with success , Volume 1: Step by step to your own market niche. Crash course for the specialization of small and medium-sized web shops , Hww.MEDIA/Radolfzell, 2009, ISBN 978-3-942121-00-2 .
32. ↑ Pero Mićić, Der ZukunftsManager , 2003, p. 122
33. ↑ Steve Wozniak , iWoz - Computer Geek to Cult Icon: How I invented the personal computer, co-founded Apple, and had fun doing it , 2006, p. 4 ff.