Market niches are small highly focused market segments. They allow even smaller businesses to be major market dominant players in areas that can be relatively free of competitive struggle.

Geographic focus, demographic profiling, alternative distribution channels, modifications in products or services, variable pricing, new technologies, all these are possible ways of doing niche marketing: a highly concentrated form of target marketing that allows companies to zoom in on markets that may be small but whose profit potential may be large.

As with regular markets, the best way to spot them, understand them, and address them is through market research and market segmentation. Niche markets, like all markets, are driven by consumer wants and needs. The more closely one understands the characteristic drives and purchasing patterns of any market, niche or otherwise, the more likely success is to follow.

Niche markets don't require a company's total focus. A large company can address both a large market and a niche market at the same time, indeed, the smaller size and tighter focus of a niche market can make it the ideal target for experimental or developmental testing of products or services.