A niche of market is a small segment of Marché (in terms of customers or products). The number of actors on the side of the offer is restricted there but the niche is regarded as profitable, from the not very competing structure of its market. The request must be in this case sufficient to maintain this profitability.

Niche and market evolution

When profitability increases, the niche can become an important segment, even a mass market with whole share, as it was the case in the field of the car for the 4X4 (at the beginning military vehicles or of bush) in North America (SUV - Sport Utility Vehicle). In this case however the manufacturers who had neglected the niche can play it in their turn (effect of imitation) and return the market more subjected to competition.

The companies being in a niche, have a position of quasi monopoly, therefore having an competitive advantage.

Conversely, a mass market can become a niche market, as in the case of the silver Photographie, where the black & white preserve its followers. In this last case, the main actors of the offer could:

• to decide to withdraw market (Kodak mainly)
• to sub-contract their production (Bergger, Tetenal…)
• to restructure their organization in order to become the major actor of the niche (Ilford).

See also Strategy of niche.

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