Niche Marketing (Re)defined

Conventional marketing wisdom — from the 80/20 rule to any kind of ROI analysis — tells us that focusing on a target market is necessary for achieving success. “We sort of use the bed of nails theory of niche marketing,” says Pattie Garrahy, CEO of PGR Media (, the strategic marketing, media planning and buying agency for companies such as Tommy Hilfinger, Hathaway and Keds. “It’s a painful theory,” jokes Garrahy. “If you try to be all things to all people, you can’t succeed. You can’t feel the nails. However, if you lie on one nail, you can really feel that one nail. You need to focus to create success.

But where to focus becomes a challenge. “The challenge in choosing the best target markets comes from two directions. First the target market needs to be narrow enough to allow us to efficiently market, to get the most bang for our buck. At the same time, it needs to be large enough to have sufficient sales potential to support the company, reports ClickZ’s ( Cliff Allen, coauthor of One-to-One Web Marketing (ISBN: 0471404004). ” Many companies, in an attempt to appeal to a large audience — thinking that doing so will increase revenue and profits –dilute their marketing message. Selecting a narrower target market allows a company to focus marketing communications on specific customer needs. As a result prospective customers have more confidence that the company understands their needs; that confidence, in turn leads to a closer relationship and increased loyalty,” continues Allen.

There are, of course, many ways to define a niche market, but the experts agree that focusing on a narrow target remains the key ingredient to finding your best markets.

Focus on Product Applications

NASA has been marketing commercial technology since the early 1960s, however according to Michael Weingarten, Director of Marketing for the Commercial Technology Program, “up until recently it was kind of a passive marketing program.” All that changed with a direct response program launched in mid-January. Developed in conjunction with Kern Direct (, the campaign is about bringing NASA technologies down to earth, and capturing the attention of the business world.

It All Starts With Research

Research is the first layer of a niche marketing program. As Garrahy describes it, “target intelligence work” is about identifying and defining your target customers and then using that information to develop a messaging and media plan that appeals to them based on their purchasing motivators. The targets for NASA’s direct response campaign were “the industries where NASA’s research would be considered cutting edge” according to Weingarten. “We used external lists of R & D Managers and Presidents and new Product Developers from a wide range of vertical industries that NASA services,” says Russell Kern, president of Kern Direct.

Let a Niche Emerge From a Product Line Extension

Research was also a key component in the formation of Gettyworks (, a new line extension from Getty Images ( The original company is a large supplier of photography and commercial illustrations to professional graphic designers, while the spin-off is a B-to-B venture aimed at enabling businesses to produce professional looking materials in-house. According to Kim Freeman, Vice President of Getty Images, “the decision to form and market Gettyworks came about because we noticed a trend in the market.” The research backed up their findings, and a new product was born.

Find an Emerging Niche for a Leading Edge Product

“Technology was enabling an increasing number of users to take advantage of the graphics products that are out there,” says Freeman. “There’s about 30 million businesses on the internet today — 45% of the people we talked to believe they do more of their own business materials than they did just one year ago, and about half of them believe they’re gonna do more in the next year. There seems to be a real opportunity in the market.”

An opportunity in the market was also a motivator for NASA. “Most people don’t even know that technology is available,” says Kern. “What we’ve done is create a direct response lead generation campaign to help let people know that if they want to develop new products or new ideas, there are resources available to them.”

Both NASA’s direct mail campaign and Gettyworks’ initial marketing efforts were aimed at driving traffic to their websites. This will continue to be a trend, predicts Don Eperson, CEO and Founder of Hook Media (, an interactive media planning and buying firm. “We firmly believe that as advertisers continue to grow more comfortable with the media and as the media grows up a little bit, you will see that shift to a higher percentage of total advertising budgets going to online. There are just simply too many people that are using the computer all the time to get their media.

Use Multiple Forms of Media and Promotion Channels

Whatever the core audience that you’ve determined for your product, the marketing plan should derive from the unique characteristics of that market. In targeting teens, for example, Garrahy says that based on their research, they will select “the most highly used or consumed media form, probably something like an MTV and certain vertical titles and certain radio stations in certain markets and geography. We put those pieces together and form plans that are certainly media based but they also include everything from promotions at point of sale through those channels. In today’s world there’s also usually a very strong online piece.”

In the case of NASA, one of the key tools is a magazine called “Spinoff” which features successfully commercialized NASA technology.

“Another marketing strategy is to use education — workshops and seminars — to tell the business community about the 25,000 different technologies that NASA has developed over the years” says Weingarten.

Whether the niche you’ve targeted is demographic, geographic or psychographic, your best markets will emerge if you focus on your product applications, do your research, and stay on top of emerging trends. Whether your niche market develops as an outgrowth of your core business or as a product line extension, flexible, multi-channel marketing strategies are your ultimate keys to success.

Originally published in SAM Magazine in May 2001.