Tuesday, February 9, 2010

Variety versus Niche

The current trend today is to capitalize on a large variety. For example, many new eateries opening in Kuching offer large varieties of food to cater to everyone looking for a full course or simply a light snack. In addition, old shops have started to follow this trend by offering more than just their ‘trademark’ or ‘specialty’ food as they have found various customers looking for different types of food. Coming back to variety, the reason that this business trend is evergreen is that it is very hard to predict the exact needs of customers or to gain potential customers. By offering a large variety, customers have various choices and prospective customers may also find just something that they like or need.

In contrary to variety, another much untapped market is the niche market. Basically, you would be trying to offer a business or service that is highly specialized and caters to a small but highly lucrative market. With high returns, there are also high risks. When trying to launch into the niche market, you need to have an extremely clear vision on your target market and be confident of the feasibility of your products or services. The only way is to do your homework by conducting analytical studies and considering various aspects over and over again. If it is successful, this market can be highly profitable but the trade off is high initial capital risk in case the products or services do not favor your target market.

There is no exact answer whether you should focus on variety or try to target a certain group of customers. One of the ways to gain some idea is to do market research, talk to prospective customers and consider how much you are willing to invest in the business. In addition, starting of small gives you a great opportunity to find out what works best and room for mistakes without so much damage. In fact, the ability to manage a small business well is a great starting point to prepare for expansion as you have built a solid foundation and basic principles for doing business.

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