In marketing terms, niche refers to two inter-related ideas. First that there is a
place in the market for a product, and second, there is an audience for this product,
where both place and audience are seen to be particular entities. This can be extended further to refer to a specific product tailored to meet the needs of a particular audience/market segment. The clear premise is that the market should
not be seen as some simplistic homogeneous whole with general needs, but rather as
sets of individuals with specific needs relating to the qualities and features of
particular products. Thus we can speak of a ‘niche market’ as a more narrowly
defined group whereby the individuals in the group are identifiable by the same
specialised needs or interests and are defined as having a strong desire for the
products on offer. The size of a niche market can vary considerably but effectively it
needs to be balanced between being large enough to produce sufficient business and
small enough so that it is overlooked by competitors. Behind the idea of a niche
market lies a knowledge process that involves producers, researching, identifying
and targeting specific audiences and maintaining a relationship with them in the
face of competition. Following Hannan and Freeman (1977) the ‘niche’ term is
rooted in ideas of competitiveness where, in ecological terms, a distinction can be
made between ‘fundamental’ niches which would refer to the size of the potential
niche or market segment, and realised niches, which refer to the actual size of the
market in the face of competition.