Niche marketing is the process of searching out small but profitable market segments via custom-made products or services to service this niche. Essentially, it is a marketing strategy to address focused target segments, or narrowly defined group of prospects largely ignored by mainstream providers. Large corporations, by virtue of their business clout, often forgo niche segments for the mass segments by way of economies of scale which accords greater profitability. Having said this, there are large corporations which focus specifically on niche markets, whereby the niches are identified as profitably viable and usually dominate that space.

Traditional niche marketers are often reliant on the loyalty business model to maintain a profitable volume of sales. I shall address the slight difference between online niche marketing and traditional niche marketing at a later stage.

Niche markets can open windows of opportunities for entrepreneurs and become feasibly profitable, at times in a big way against mainstream competition, thanks to the clever implementation of strategic focused specialization, and a largely dismissed segment by large competition. Simply look to Ben & Jerry’s Premium Ice Cream and you will know what I am driving at.

In the Porter’s Competitive Advantage Model , niche marketing dominates the "Differentiation" and/or "Differentiation Focus" quadrants of the matrix, with the former expounding on intrinsic value-added features as well as benefits, and the latter on extrinsic, high niche perceived value of the product/service.

Sourcing and researching the customers initially could be a challenge but it is true that you will be able to lock them in as your life-long customers once you are able to meet and exceed their needs with your products and services, continuously enhancing and delighting them with the product/service experience.

Note that your success to dominating your niche market is reliant on easy access a group of fast-growing prospects with no current dominating competitor in sight as yet. Work out a comprehensive marketing plan, have a stream of products in consecutively to ensure that you lock in the loyalty of your customers and henceforth, protect your continued profit streams.

Remember, this is your space, your niche and you must grow it with the ultimate aim to dominate it.