Niche marketing defeats large competitors

Just finished reading David and Goliath by Malcolm Gladwell. In the book Gladwell tells how apparent weaknesses instead may be to your advantage. Gladwell references to research regarding successful entrepreneurs having dyslexia in larger extent than others. Resistence and difficulties, Gladwell tells, are driving forces seeking alternative and maybe “odd” ways to success in life and business.

Another example in David and Goliath is Caroline Sacks – a very talented student with top results all years until she went for University studies. She chose between Brown and Maryland for studies in Science. Brown is one of those elite schools, while Maryland is only “good”. Sacks chose Brown.

Sacks loved science, but after just a short while she left University without finishing her studies. Why? According to Gladwell she found herself not being the No 1 for the first time. Gladwell points out if Sacks had chosen Maryland she had still been in Science; it’s better being a big fish in a small pond than a small fish in a big lake.

It’s like niche marketing – being a market leader in a tiny vertical is many times regarded as a successful strategy. Reconnecting to my blog post Strategy Myopia (inspired by Marketing Myopia by Theodore Levitt) I was discussing companies’ strategy defined too narrowly. However, that’s may not always be true for Marketing.

According to Geoffery A Moore, and theory of Crossing the Chasm implies that marketing in very niche segments to achieve market leadership is essential for fast and organic growing.

Moore points out success against established competitors requires seeking niches where you can be The Number One and act from that point. Why? Because most buyers hates risk and therefore prefer established market leaders.

The tricky part is to find a very tiny vertical, but with potential adjacent – and tiny too – niches to expand to. Moore describes this as The Bowling Alley, where the bowling pins are the niches. If one pin falls, it’s likely some of the adjacent will fall too. The result is a wider market leadership managing several niches in one big, recognizing you as The Number One. Pragmatic and Low Risk Buyers start turning to you instead of their former established suppliers.

Summarizing, the process starts when you are under pressure and you think about giving up. Difficulties and inferiority are really good things; they are the sparks thinking differently, finding other ways. Such way may be your first niche. Having a wider strategy, you would think of several adjacent verticals, but you start only with one. Select one where you got good customers with strong success stories.

Best Regards
Stefan

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