-
- Win $100 in prizes!
-
|
Niche Markets
The more specialized
your niche market the better off you are, as long as the market
is large enough for you to generate the volume of business that
you need. A specialized market can be more easily mastered by
a small organization.
© 1998,
by Dr. Tom Williams
Kitchen-Table Publishers
identify and exploit niche markets. This is what makes them successful.
Often they may go even further and develop a niche within a niche.
But what is a niche market? How do you recognize
one? How do you estimate its potential for profit?
Three
Criteria
A niche market is composed of
individuals or businesses:
- that have similar interests
and needs;
- that can be readily identified;
and...
- that can be easily targeted
and reached.
A potentially profitable niche
market will also have one other indispensable element: a broad
base of businesses ready and willing to buy advertising space
in order to reach the individuals who comprise the niche readership.
Writer's Digest magazine, for instance, is a niche
market publication. Advertisers buy space in it because they
want to reach the niche market of beginning writers who comprise
its readership.
Another Example:
I met a young man recently who
had just cranked up a very successful tabloid called Hospital
Business News. He publishes this bi-weekly in the Miami-Fort
Lauderdale area, a massive metropolitan market. He had identified
this niche himself and had seen that he had virtually no competition
in it. He also recognized immediately that he could target both
readers and advertisers with great precision. Furthermore, the
potential advertisers he had in mind all had a great deal of
money budgeted for the purchase of advertising space. This publisher
had discovered a niche market that met each of the three success
criteria described above.
If you are a book publisher rather
than a periodical publisher, you might specialize in titles targeted
toward special interest groups: antique collecting, doll making,
scuba diving, home business start-ups in any number of areas.
Readers interested in these fields can be reached through specialty
shops, mailing lists of members of interest groups, mailing lists
of purchasers of related products, mailing lists of subscribers
to special interest magazines, etc. Furthermore, as you sell
one book you will be building your own mailing list of satisfied
readers who will purchase other titles in their field of interest
as you publish them. Or you might choose to specialize in titles
that will appeal to a much broader base of readers, but in a
limited geographical area. You might publish, for instance, The
Outer Banks Shell Book; Surfing Guide to the Outer Banks; Hang
Gliding at Nag's Head; or the Insider's Guide to the Outer Banks
(an actual title), and so on.
The
Importance of Specialization
The more specialized your niche
market the better off you are, as long as the market is large
enough for you to generate the volume of business that you need.
A specialized market can be more easily mastered by a small organization.
Every nook and cranny of it can be ploughed and farmed, like
a small, fertile plot of land.
One of the most successful independent
publishing companies in business today is that of Dan Poynter,
author of an how-to book on hang-gliding. Too narrow a market?
You might think so, but it didn't turn out that way. Dan sold
tens of thousands of his self-published hang-gliding books under
his own Para Publishing imprint. The fact that his book was highly
targeted to a specific readership of persons with a shared interest
made marketing it feasible for a one-man company such as his.
(Dan has told others how to repeat his success in his fine book,
The Self-Publishing Manual.)
There was a finite number of
hang-gliding shops in the country. Dan was able to contact each
of them and place his book on sale in them. Had his topic been
more general, selling it would have been much more difficult
because the potential readership would have been more diffuse
and harder to target. A far greater amount of capital, time and
highly speculative up-front marketing costs would have been involved.
How
I Discovered a Niche
I had a similar experience when
I first ventured into the publication of real estate guides.
The field of real estate publications is a broad one. Further
specialization is needed for a niche within a niche. The niche
I chose was that of apartment comparison guides. Even in a large
market like the state capital of a major southern state (where
I brought out such a guide), the number of apartment management
companies handling apartment complexes was limited. There were
some 350 apartment complexes, but fewer than 20 major management
companies. Some of these handled as many as 30 or 40 different
units.
Now, this was a true niche. It
offered intensive sales in a limited geographical area and to
a highly targeted clientele. I could call on this number of clients
myself, if need be, and in the beginning I did just that. Because
we published semi-annually I was also able to handle all photography,
ad design, production and distribution, with a minimum of free-lance
help. The apartment guides themselves were easy to produce, but
each of them contained up to $100,000 in advertising.
Niche
Markets Are Manageable
A niche market is important because
it is manageable: you can easily get your mind around it, your
pocketbook around it and your hands around it. It is also much
easier to create the necessary visibility for your own company
within a limited segment of the business community. After I had
made a preliminary call on the most important management companies
and generated a few news articles in the business pages of the
daily newspapers, I was pretty much known and talked about. All
that remained was for me to prove to potential advertisers that
my magazine was more affordable, more widely distributed, better
designed and therefore more effective than the publications of
my competitors. From the very first my apartment comparison guides
showed a profit. This profit continued to grow issue by issue
until I sold the business some five years later.
Other
Niche Successes
Intensive sales in a limited
geographical area and to a targeted pool of advertisers: these
qualities of a publication are the touchstone to success in small
time publishing. You can measure the viability of virtually any
idea against them when you understand these three factors fully.
Some examples:
- The Independent, an excellent arts and entertainment
tabloid published in the university town of Durham, North Carolina,
is a niche market publication. It targets young, well-educated,
liberal men and women in a limited geographical area. It then
sells advertising to people who want to reach precisely this
segment of the population. The Independent operates
out of an old house in a less-than-thriving part of town. It
owns little equipment and has virtually no overhead beyond personnel
and printing costs. Start-up costs for a tabloid like The
Independent can be quite small.
- The South Florida Business
Journal, a tabloid
published in Dade County, Florida (Miami), and targeted toward
the business community, is a niche market publication. It started
out with just a few thousand subscribers. It still claims fewer
than 20,000 paid subscribers but it is nevertheless a very successful
business publication.
- Even a novel can be a niche
market publication. One title, for instance, might appeal to
all environmentalists (a readily identifiable group). Another
might appeal to all tourists visiting Savannah, Georgia (a limited
geographical area). Both are niche market publications.
Remember:
The Market Comes First
Sometimes entrepreneurs get things
backward. They have an idea that excites them. But the question
is, will it excite potential advertisers as well? Will anyone
buy it? Who? Why? Is there a market for the idea?
It is axiomatic in publishing
(and in any other business) that market always precedes product.
When you forget this fact you can get into trouble. A case in
point is the recent history of the failed Southern Magazine.
The initial edition was published with high hopes. Yet the gloomy
future could have been predicted. Was there a market need for
this magazine? No. Were advertisers crying out for another channel
to reach this group of readers? The answer was no again. Was
the readership highly targeted? Not at all. What there was, was
a group of young editors and writers who simply wanted this magazine
to become a reality and to succeed. A business plan was developed;
meetings were held with potential investors. Eventually the project
was capitalized at a reported (according to a conversation I
had with the first editor) five million dollars. Two or three
years later this entire sum (and more) had been spent and the
magazine foundered. It changed its name and tried again, but
still with little success.
The creators of this publication
started with an idea and then tried to make the market like
that idea. The successful entrepreneur, including the "Kitchen
Table Publisher," analyzes the market first, decides what
it needs and what it will accept, and then creates a specific
niche-market magazine or book that will satisfy a specific niche-market
need.
Market
Position
Publishers of advertising-intensive
periodicals, especially, will have to wrestle with the problem
of market position: the defining of your image and the precise
customer benefits that you offer relative to all those competitors
who are attempting to occupy the same niche.
You do this for two reasons:
- to develop a clear public image
for your own business so that potential customers know why they
should do business with you rather than with someone else;
- to develop a clear image for
yourself of precisely who your customers are so that you can
develop a successful sales and marketing campaign based on this
knowledge.
When my partner and I set out
to publish an apartment comparison guide in a major North Carolina
metropolitan area, we first surveyed the market. Vacancy rates,
we found, were quite high. Furthermore, we discovered that the
major player already in this market (a well-established, full-color
apartment guide) had just increased its publication schedule
from three times yearly to four times yearly. Moreover, they
had done this without lowering the price of advertising space.
To advertise regularly in this
publication, therefore, now cost a third again as much as it
had cost formerly. A full page ad cost about $1200. Prior to
the increased publication schedule, a full year's advertising
had cost $3600. Now, at four times a year, the same space, on
an annual basis, cost $4800.
I felt that we could go into
this market and come out twice yearly. Since we would print more
than twice as many magazines per print run as our competitor
(in order to top their yearly circulation figures), our per unit
production cost would be far lower than theirs. We could match
the high quality of the competing publication and charge $1600
for a twice-yearly full page ad ($3200 per year). In this way
we could provide the same total circulation and help our advertisers
maintain their budgets at levels that they had become used to
and budgeted for.
We therefore positioned ourselves
as the company that understood our customers' budgetary problems
and that was willing to work within them. We became the company
that tried harder, worked with more imagination and always went
the extra mile to serve our clients' needs. That was our market
position, our "niche within a niche." We understood
it clearly, built on it, and it worked.
This whole story is found in
the chapter, "How to Make Money Publishing Apartment and
Real Esate Guides," in the book, Kitchen-Table
Publisher.
Do you see niche market opportunities
around you? Is there a well-defined group of readers that advertisers
want to reach? Can you devise a publication that will appeal
both to these readers and to your base of potential advertisers?
Is so, you may have discovered the opportunity you are looking
for.
- Dr. Tom Williams is the author of Kitchen Table Publisher and owner
of Venture
Press, specializing in
book packaging, typography and design and producing books and
reports on publishing city and regional magazines, weekly newspapers,
guidebooks, specialty books, etc. You can reach him via e-mail,
publish@gate.net, his web
site, http://www.pubmart.com,
phone (954) 796-0104 or his address, 12445 NW 10th Court, Coral
Springs, Fl. 33071.
|