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A niche market is the subset of the market on which a specific product is focusing. So the market niche defines the specific product features aimed at satisfying specific market needs, as well as the price range, production quality and the demographics that is intended to impact. It is also a small market segment. For example, sports channels like STAR Sports, ESPN, STAR Cricket, and Fox target a niche of sports lovers. Every product can be defined by its market niche. As of special note, the products aimed at a wide demographic audience, with the resulting low price (due to price elasticity of demand), are said to belong to the mainstream niche—in practice referred to only as mainstream or of high demand. Narrower demographics lead to elevated prices due to the same principle. So to speak, the niche market is a highly specialized market aiming to survive among the competition from numerous super companies. Even established companies create products for different niches, for example, Hewlett-Packard has all-in-one machines for printing, scanning and faxing targeted for the home office niche while at the same time having separate machines with one of these functions for big businesses.

In practice, product vendors and trade businesses are commonly referred as mainstream providers or narrow demographics niche market providers (colloquially shortened to just niche market providers). Small capital providers usually opt for a niche market with narrow demographics as a measure of increasing their financial gain margins.

Nevertheless, the final product quality (low or high) is not dependent on the price elasticity of demand; it is associated more with the specific needs that the product is aimed at satisfying and, in some cases, aspects of brand recognition (e.g., prestige, practicability, money saving, expensiveness, planet environment conscience, power, &c.).

Niche audience

Technology and many industrial practices changed with the post-network era. There is a new drive for niche audiences because audiences are now in much greater control of what they watch. It is very rare to have a substantial audience to watch a program at once, with the few exceptions of American Idol, Superbowl and the Olympics. Still, networks do target particular demographics. For example, Lifetime targets women and MTV targets youth. In this context of greater viewer control, networks and production companies are trying to discover ways to profit through new scheduling, new shows, and relying on syndication. This practice of "narrowcasting" also allows advertisers to have a more direct audience for their messages.

In the fashion industry a growing trend is to have shop-in-shop setups where big stores promote niche brands inside to draw in new demographics.

Online niche marketing

An often used technique for affiliate marketers is Internet-based niche segments of larger markets, referred to as niches. A website can be developed and promoted quickly to uniquely serve a targeted and customer base, giving the affiliate a small but potentially durable source of revenue. This technique can then be repeated across several other niche websites. A bigger niche is harder to market to as the expense of online advertisements increases according to the popularity of the keywords used (on Adwords, for example).

Some niches may become saturated with marketers, increasing competition and thus reduce the slice of the pie available to each competitor. One solution is to find smaller, "undiscovered," but still profitable, niches, usually by searching out the best keywords to target. These lower cost keywords are called long-tailed keywords, as in the long tail of secondary keyword phrases that usually follow the main keyword in popularity of number of searches conducted by internet users. Because some are so obscure as to have few or no clicks per month, the trick is to find the right ones to target.

1. Pronunciation of "niche": most commonly either /niːʃ/ or /nɪʧ/
2. "3 Rules for Niche Marketing". Entrepreneur. Retrieved 2012-7-9. {{cite web}}: Check date values in: |accessdate= (help)
3. The Television will be revolutionized Amanda Lotz 2007 pg180
4. Britten, Fleur (2006-9-29). "New meaning for the term 'niche market'". NY Times. Retrieved 2012-7-5. {{cite news}}: Check date values in: |accessdate= and |date= (help)