Niche Marketing Tips – Top Down or Bottom Up?

Niche marketing is all the rage these days. Sometimes, I think it’s misunderstood.

You could look at niche marketing as a staircase. The top step is the mass market. The steps below are niche marketing opportunities, and they get smaller as you go down the stairs.

In the coffee market, Starbucks made a killing by taking just one step down from the mass market. They focused on the niche for premium coffee served in a “premium” environment.

Part of their success can be attributed to how they looked at the coffee market. They took a top down approach to finding a niche, versus a bottom up approach.

Top-Down Niche Marketing -- look at a big market and drill down to find the largest possible market for a niche offering. In my view, Starbucks didn’t have to look far. Because Starbucks took just one step beyond the mass market, the niche was big enough to support consistent growth.

Bottom-Up Niche Marketing -- race to the bottom of the staircase with the smallest imaginable niche and then get to work on meeting their needs. To carry on the coffee example, bottom up niche marketing might start with 12 oz, organic, fair trade coffee, served in 100% biodegradable cups in cafe’s using only renewable energy sources.

There’s nothing wrong with the “bottom up” example, but it’s a (fictional) example of starting at the bottom and finding a very small niche. Maybe it’s sustainable, maybe it’s not. But it’s certainly small.

My observation is that some companies start about 9 steps down the staircase and try to work their way up. But in their haste to find the next hot niche, they blow right past a bunch of empty stairs on the way down.

Starbucks stopped on the first step beyond the mass market and built a strong brand.

The next time you are evaluating a niche marketing opportunity, ask yourself how many steps beyond the mass market you’ve taken, and before you commit, figure out who’s standing on the steps above you.