What is a 'niche market'?

A niche market refers to a specific segment of the market that is identified by particular characteristics, needs, or preferences, which are generally distinct from those of the broader market. Businesses often target these specialized segments to better meet the unique demands of consumers within that niche. For example, products designed for vegan diets cater specifically to the subset of consumers who follow that lifestyle, therefore addressing particular preferences and values.

Targeting a niche market allows companies to create more tailored marketing strategies and products that resonate deeply with a smaller, focused audience, often leading to stronger customer loyalty and potentially less competition compared to broader market segments. This practice is beneficial for smaller firms or startups who may not have the resources to compete in larger markets dominated by major players.