Last Updated: November 24, 2020
In 2001, a 157-year-old beer company headquartered in the suds Mecca of Milwaukee, Wisconsin was in trouble. Sales had been declining for years, and there was little hope of a rebound. The beer market was dominated by titans MillerCoors and Anheuser-Busch and their behemoth advertising and marketing budgets. Brand recognition, ad dollars, and shelf space for one of America’s oldest breweries were scarce and getting scarcer.
About 2,000 miles away, in the hipster capital of Portland, Oregon, a local sales rep for the troubled, old-school brand—Pabst Blue Ribbon—was catching on to one particular segment of that city’s youth culture—the bicycle messenger. PBR had discovered a niche.
The company’s marketing director took what he learned from those Portland bike messengers and rode it to a remarkable resurgence for Pabst Blue Ribbon. With almost no mass-media advertising or marketing, Pabst sales grew by more than 5 percent the following year. Today, PBR is the unofficial hipster beer of bike-messenger hangouts, campus bars, and underground music clubs across the country.
The PBR success story is just one of many that transformed a niche marketing strategy into positive results. Niche Marketing—which first identifies a specific segment of an overall market and then tailors a marketing plan to the habits and preferences of that market segment—is an important strategy for aspiring marketing professionals to study and master. (See also Vertical Marketing)
What is niche marketing?
Niche marketing is a targeted marketing plan that focuses on one particular section of the market that has high potential to connect with a product or service. Instead of casting a wide net in mass-media and large-event marketing, niche marketing zeroes in on strategically selected venues and media platforms that have high concentrations of these targeted consumers.
Niche Marketing Strategies
- Word-of-Mouth Campaigns: These campaigns rely more on conversations among consumers than advertising or marketing materials touting the product or service. Brand exposure is low key and subtle, such as sponsorship or giveaways at events or establishments frequented by the niche market. As a result, these campaigns take longer to develop and yield results, but the returns can be extremely high, given that word-of-mouth recommendations generally carry a lot of weight with consumers.
- Trusted-Messenger/Endorsement Campaigns: This strategy hinges on finding a few key influencers in the niche market and enlisting them as spokespersons on behalf of a product or service. An example of this strategy would to hire Wilford Brimley (a longtime actor who is known and loved by many senior citizens) as spokesperson for medical products used frequently by the elderly. The success of these campaigns is highly contingent on the credibility of the spokesperson and the sincerity with which the endorsement is delivered.
- Targeted Collateral Campaigns: This strategy relies on consistent brand exposure to the targeted Niche Market. Just about any radio station that plays a niche type of music (alternative, country & western, or classical, for example) that appeals to a certain audience will employ targeted collateral campaigns. They might distribute collateral and attend concerts by artists played frequently on their station, or advertise in local music/entertainment publications.
Who implements niche marketing?
Many kinds of companies effectively use niche marketing strategies in their overall marketing campaigns. It is an especially useful strategy for smaller companies with imited budgets and products or services that are targeted toward a certain segment of the population.
A Niche that Exploded:
One of the biggest business success stories of the 21st Century started out as an “online mixer” for college students. Mark Zuckerberg started Facebook as an Internet forum for Harvard University students to see pictures of and make electronic connections with their classmates. The site was initially marketed exclusively (and very successfully) to college students before exploding onto the cultural and societal landscape in the US and then internationally.
Even large companies and organizations that offer products and services that are widely used and mass marketed often use niche marketing techniques. Most major car companies, for example, now offer energy-efficient hybrid models of their automobiles that appeal to niche segments of the population—environmentalists and urban drivers with long commutes. They hone in on that smaller segment of their market with high visibility on city highways and in the stores, magazines, and online sites frequented by especially “green” consumers. (See also Green Marketing)
What kinds of customers are effectively marketed to with niche marketing?
Niche Marketing is especially effective for reaching consumers who can be targeted based on certain characteristics, such as demographic, hobby, occupation, or commitment to social or political causes. Some examples of customers who could be the focus of Niche Marketing include:
- Couples planning for a wedding
- Young professionals
- Pet lovers
- New homeowners
How is a niche marketing plan developed?
When a company begins to implement a niche marketing plan, they first attempt to answer important questions that will guide their ongoing efforts. What magazines does the targeted niche read? What radio stations do they listen to? What websites do they have bookmarked? Who do they follow on Twitter? Are their product choices more likely to be influenced by advertising or word of mouth?
Pabst’s marketing director decided that he was going straight to the source when researching their potential niche market. In Portland, very informally and unannounced, he learned what the bike messengers liked about the PBR brand: old school, not flashy or mass marketed, hip and off the beaten path (See also Influencer Marketing). He learned about how their customers spent their free time, their fashion sensibilities, and their aversion to all things “corporate.”
Once there is a strong familiarity with the targeted niche, the marketing plan can be developed. Every aspect of a plan—beginning with the look and feel of the branding on through to the marketing tactics employed (event sponsorship, advertising, giveaways, brand ambassadors)—is tailored to the sensibilities and preferences that were discovered during initial research.
The ongoing niche marketing plan can either be subtle or more obvious depending on the niche’s values. PBR’s marketing director started distributing small pieces of the Pabst swag (buttons, hats, pins) to customers to thank them for their business and to help the brand spread. The company also began sponsoring small events that drew the same crowd. There were no billboards, no commercials, and no big advertising splash. The research indicated that the niche appreciated subtle, restrained marketing that relied on word of mouth over aggressive, in-your-face commercial marketing. That familiarity with their niche customers and the company’s fidelity to its word-of-mouth marketing plan led to the now 168-year-old company to build an impressive following among young beer drinkers.
What types of careers work with niche marketing strategies?
Market Research Analyst
What do they do?
Salaries in Niche Marketing
- Market Research Analyst
Median pay: $53,000
Top earners: $73,000
- Marketing Coordinator
Median pay: $41,000
Top earners: $53,000
- Marketing Manager
Median pay: $66,000
Top earners: $98,000
Market research analysts research, analyze, and report on key components of the targeted niche market with close attention to identifying trends and competitive insights to help inform the marketing strategy. Effective market research analysts have a strong familiarity with the different types of research options, expertise in gathering and analyzing data, and excellent communications and presentation skills.
Education and Skills
Most market research analysts hold a bachelor’s degree in business, statistics, or one of the social sciences and have 1-3 years of related experience.
What do they do?
A marketing coordinator assists in the market research and in the execution of the marketing plan. The duties include overseeing events and sponsorships that are geared toward consumers in the niche market, gathering and organizing research data, or helping to write and design marketing materials that are consistent with the overall plan.
Education and Skills
To be considered for a position as a marketing coordinator, candidates will generally need a bachelor’s degree in marketing or communications and 1-3 years of related experience.
What do they do?
The marketing manager provides oversight on all aspects of the marketing campaign, from research to execution and evaluation of effectiveness. Marketing managers take a leadership role in identifying the niche market, determining the most effective methods of research, and developing the overall tone and tactics of the campaign.
Education and Skills
The position of marketing manager is a senior position. A minimum of a bachelor’s degree in marketing or communications is required, and some positions will require a master’s degree. Candidates for the position of marketing manager will be expected to have at least 5 years of experience in the field.
How can a marketing school help you succeed?
Our Recommended Schools
Because niche marketing is targeted and specialized, it requires a strong background in consumer research, as well as a deep understanding of marketing principles and strategies. Marketing programs offer general courses in business, economics, and basic marketing principles that provide an overview of how companies work and compete for market share and customers.
Niche marketing, however, requires an in-depth knowledge of both the product or service and the target consumer .
Most marketing programs offer in-depth courses on product research and how to identify niche markets. This often includes classroom projects using real-world scenarios that provide examples of how niche marketing plans can go from ideas on paper to strategies put into action. Many marketing schools also provide internship opportunities that allow students to work alongside professionals in the field, giving added relevance and impact to their coursework
For more information on how a marketing degree can help you become a highly successful niche marketer, contact a range of schools that have a marketing program and request details on the courses and internship opportunities they offer.
The Ideal Niche
This Venn diagram shows the ideal combination for targeting a Niche Market: heavy demand for a product or service, high income potential, and light competition. There is high-return potential for Niche Marketers who can research a particular market and find a segment that has two or all three of these characteristics.