Long tail and niches

Usually, there are always niches in any market - small groups of consumers that have a clear preference for products that (though satisfying the same basic need) are different from all the other. Many times, companies think those niches to be too small to be actually considered and leave them for small players that especialize on those niches - or, as happens many times, leave those specific needs unanswered.

But there is a flaw in this line of thought. And the flaw is to think 1% of a market can't be profitable and attractive to a large scale business - your questions should be what's the size of the universe (so, how many people are actually 1%, what is their purchasing power and how much do we think they are ready to pay for this product) and what's your business operational model. You can actually put up an operational model that profitably sells to 1% of a market. Just think of an internet based operation, with a potential universe of more than 2 billion consumers - like Amazon did. Amazon sells mainstream titles, but also incredibly obscure and hard to find books that are only appealing to some fringes of their consumer universe - but it's business model allows to sell both of these books (the mainstream and the niche) exactly the same profitable way. And a considerable amount of their income actually comes from those titles that "nobody wants". Amazon operates on what is called a "Long Tail" model.

So, even small niche markets may represent huge opportunities - you just need to make sure you think the market right and you are able to put through the right operational model. One that is actually able to appeal and reach to the whole universe niche and not just to a fragment of it. And one that is then actually able to serve your whole customers on a simple profitable way. The internet has become the answer to many of these long tailers, because of its broad reach and simplicity to use and it is where you can find most of the long tail techniques being used and developed.