Resegment an existing market as a niche player

Niche re-segmentation looks at an existing market and asks, “Would some part of this market buy a new product designed to address their specific needs? Even if it cost more? Or worse performance in an aspect of the product irrelevant to this niche. Niche re-segmentation attempts to convince customers that some characteristic of the new product is radical enough to change the rules and shape of an existing market. Unlike low-cost re-segmentation, niche goes after the core of an existing market’s profitable business.

Both cases of re-segmenting a market re-frame how people think about the products within an existing market. While re-segmenting an existing market is the most common Market Type choice of new start-ups, it’s also the trickiest. As a low-end re-segmentation strategy, it needs a long-term product plan that uses low cost as market entry to eventual profitability and up-market growth. As a niche re-segmentation, this strategy faces entrenched competitors who will fiercely defend their profitable markets. And both require adroit and agile positioning of how the new product redefines the market.

Part of book: The Four Steps to the Epiphany