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Niche marketers must resist standardisation.

The key to successful niche marketing is to provide significantly superior solutions for small groups of customers than larger companies are able to offer I argue this means niche marketers must resist standardisation at all costs.

Niche marketing by definition means focussing your company efforts onto a particular and closely defined group of customers.

This often implies and demands a greater targeted innovation than could be applied by companies who are aiming for volume, share of a large market or cost leadership.
It implies niche-marketing companies should not compete on price, rather by attempting to achieve the best value for money or superior cost benefit in the eyes of their customers.

It follows that enforced standardisation at the industry or government level is the enemy of niche marketing because enforced standardisation tends to reduce difference in available features while increasing direct price competition.

A side effect of reduced feature difference could be argued to be reduced or at least restricted innovation, which could not be in the customer interest.

Standardisation, on the other hand, is a goal often pursued by large players who want to remove non-price competitive elements from the market.

Large players can afford to lobby for the adoption of standards, which (unless they are very stupid) will tend to favour their technologies and will certainly favour their ability to leverage their position of volume sales to gain cost advantages and become the low cost producer.

Often the arguments supporting the standardisation lobby will be couched in terms of consumer rights because standard products allow consumers to compare like with like. However niche marketers work to provide what their customer wants, it is not in their interest to limit customer choice to a range of similar products from different manufacturers.

A subtext to standardisation issues is often the creation of entry barriers.

Many players love to create standards, which can slow an influx of foreign products whose influence may otherwise have reduced the value of their local markets. Both these motivations, the removal of non price elements and the erection of entry barriers, are the enemy of the niche marketer who, in their focus on a particular group of customers, is working to provide the best solution and best value for money rather than the lowest price.

Of course the successful niche marketer may eventually create a monopoly in their chosen niche, this effectively would be an established product standard.

Established product standards in niche markets differ from industry standardisation in that they are created primarily because of consumer choice for the best solution while the forces pushing for industry standardisation are usually large players using their influence with regulatory bodies or government departments.

Author Mark Abraham (mark@sticky-marketing.net) 30th November 2001