3 steps to conduct niche market research using Travelspot as an example
One of prerequisites of a successful business is knowing your market and customers. But how do you find your nook in a market oversaturated with a million ideas and products? This blog offers a simple 3-step process to do just that.
To cover the basics, a niche market is a small segment of the market that your product, service, or brand caters to.
For a small business, niche market research is an essential component for planning. To increase your chances on the open market, you will need to research your niche first. It will give you answers to important questions:
- Is there a demand for my product or service?
- Who is my closest competition?
- How can I be different?
- Who is my target audience?
As mentioned in The Economics Times, "Niche marketing is defined as channeling all marketing efforts towards one well-defined segment of the population. There is one important thing to understand that 'niche' does not exist, but is created by smart marketing techniques and identifying what the customer wants."
This blog will cover the basic guidelines for conducting niche market research taking Travelspot, our client, as an example.
But first: what is Travelspot?
To help you understand what niche Travelspot covers and explain our process, here is some general information.
Travelspot is a business travel management platform that allows you to optimize your business travel. Within one application, you can singlehandedly organize your trip, keep track of expenses and manage your costs via travel policies. It simplifies expense management and expense reporting within an organization. Besides research, we were involved in multiple projects with Travelspot: visual identity, brand strategy, web and mobile app development.
With 24/7 support, Travelspot experts resolve all of your travel situations on the spot, from flight cancelations to unexpected changes in your business trip plans.
So, now that you know more about Travelspot, let's kick-start our main topic.
Steps to conduct niche market research
Niche market research is best done via a 3-step process.
Step 1: Identify problems that the market does not have an answer for
A great idea for a niche market does not have to come from detailed research. It can come to you when you are stuck at the airport when you missed your flight because the previous flight got delayed. So you try to find a hotel room in a country in which English is poorly spoken and book another flight to your destination, all by yourself. That is how the idea for the Travelspot was born.
There is also a more traditional way of finding your niche. It comes from detailed research of the market. For example, Reddit or Quora can help you with people's requests about your niche.
Some tools, like Google Trends, can assist you with the overall idea of how big your potential market can be. In addition, some SEO tools like Google SEO Essentials can give you a more detailed analysis of your niche.
Step 2: Determine the profitability of your niche
To assure that you will succeed in your niche, it is essential to know what your prospects look like.
You can start by looking at the competition that offers similar products or services. With that information, you can analyze your business costs and profits.
One of the red flags in your research can be the lack of information about the niche. While there is a chance that there is still a market out there, a lack of usable data can indicate a smaller than expected customer base.
What you want is to find a small niche with a good profit margin. That’s a sign of an unsaturated market and limited competition, and in that environment, you have a place to grow your business.
For the global business travel industry, in the "pandemic" year of 2020, the data show that market size was valued at US$ 695.9 billion, and it is expected to reach US$ 2,001.1 billion by 2028. That is a CAGR (Compound Annual Growth Rate) of 13.2 % in the period from 2021 to 2028.
With that kind of growing market and no market answer for business-focused travel agencies, Travelspot was created.
Step 3: Research the competition
It is almost impossible that your niche will not have any competitors. There will always be a company covering at least part of your niche.
Competition is a positive sign, and it means that there is money to be made in your desired niche. While too many competitors can drown you before you even start, a few decent-size competitors can help you capitalize on the existing market. To do that, you will have to research your competition's offer and find an area they might be overlooking. That way, you can get an easy road into the niche.
It is essential to check the potential issues that the competition has that you can use, for example:
- Low-quality content
- Lack of transparency
- Lack of paid content
- Overcorporatized environment
Travelspot focuses on offering a full service: from organizing every segment of the trip, to providing support and up to date travel information. Travelspot also has consulting service that can assist you in your travel option research and provide valuable advice about your journey and destination while staying within the budget.
There’s no one-size-fits-all approach
Once you confirm that your niche is viable, you can continue with the other steps such as developing your business plan, brand, visual identity, website, etc.
Keep in mind that this blog covers basic steps for finding a niche, and there is no unified process that works for everyone. You will have to do detailed research, but try not to get stuck in the planning stage. Plans can be adjusted, but if you do not start, you will never know if you were on the right track with your initial ideas.
Lastly, believe in yourself, and if you think you have found the business idea worth investing time and money in, take the risk. Learning and growth from "doing" are far better than theories that you can get by just "planning."
Your take on the subject
They say knowledge has power only if you pass it on - we hope our blog post gave you valuable insight.
If you want to share your opinion or learn more about how we perform niche market research for our clients, feel free to contact us. We'd love to hear what you have to say!