Niche marketing and customer segmentation, according to Hartline & Ferrell (2013), happens when a company taps into the particular needs of a subset of customers, also known as a segment, and serves them better than the competition. As a result, the company obtains a competitive advantage, which goes a long way to ensure survival, profitability, and sustainability in a highly competitive market. Different companies have pursued this strategy and succeeded.
Divvies, for instance, introduced the Divvies Vegan and Nut Free, which was an instant sell to its customer segment. There are thousands of companies in the sweets and snack foods industry. Brand recognition, therefore, becomes essential as the competition is very stiff. However, there is a customer segment who, due to food restrictions or allergies related to animal products, nuts, or both, could not satisfy their cravings with mainstream brands and products.
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When Divvies identified this underserved subset of the population, they created the brand Divvies Vegan and Nut Free brand to target them specifically. Selling sweets and cookies is not a new idea (girl scouts do it too), but differentiating them as vegan and nut-free created the opportunity for Divvies to stand out in an overly saturated market. Since then, different companies have launched their products and brands, but Divvies already had a big head start.
Divvies niche marketing and customer segmentation stood out because their target customers had a different lifestyle, behaviors, and needs that went unmet by mainstream companies. These, however, are not the only niche markets and customer segments out there. According to Hartline & Ferrell (2013), underserved segments can also be identified by their geographic locations, profession, culture, and occasion, among others. Therefore, when trying to stand out in an overly saturated market or when faced with stiff competition, companies can differentiate themselves by identifying and targeting underserved markets as Divvies did.
References
Hartline, M. D., & Ferrell, O. (2013). Marketing Strategy, Text and Cases . South-Western.
