SILICON VALLEY NORTH MARCH 2000

MARKETING TO THE NEXT WAVE OF NICHE MARKETS

By Chris Talbot

As the saying goes, if you try to be everything to everybody, you’ll end up being nothing to nobody. This is the philosophy of a number of entrepreneurial types who are trying to create technology products for niche markets.

Niche technology can be very profitable, says Joe Katzman, a senior consultant with KPMG in Toronto. At the very least, niche marketing is an excellent place to start. Instead of trying to please an entire industry, choose one sector. Once that sector has been captured, it is possible to grow into other sectors.

Even big companies benifit from niche marketing. For instance, Bell Canada knows the Chinese market, Katzman says. They advertise in Chinese, as well as have call centre representatives who speak Mandarin and Cantonese.

“That can be extremely profitable, and it has been one of the quiet and overloaded forms of marketing by a lot of corporations. Can you market to not just demographic niches, but ethnic niches, because they tend to be very loyal?” says Katzman.

Since the early 1990s, Warren Salmon, CEO of Toronto’s Black Board International, has used technology to address black issues. He developed a line of educational software predicts focused on black content, such as black history. The line, called Ashaware, currently has 12 titles and is sold mostly through the US in the K-12 educational level.

So far, the trend on the Internet is the big portal sites like Yahoo! Salmon says he thinks that is going to change. “I think the next wave is going to be niche market companies focused on specific groups, whether it be ethnic groups or women,” he says. “I think there’s a huge potential for niche market type companies.”

Katzman agrees. “Look at the religious market,” Katzman says. “That’s a very fruitful place.” And one that is often ignored. It has very unique needs with no shortage of products dedicated toward it. How many bookstores are without a religion or new age section?”

Marketing toward just any community could result in failure. The community has to be cohesive and referenceable, not just distinctive, Katzman says.

In the Skywriter Communications Inc. Case, it markets CD-ROM computer games to the female PC-user market under the brand name Women Wise. The first title, The Legend of Lotus Spring, was released on Valentine’s Day. A romantic adventure game, Lotus Spring is the first in a line of entertainment titles geared toward women.

“It’s something that I’ve wanted to do for a really long time, but the marketplace wasn’t ready for it,” says Anne-Marie Huurre, founder of Toronto’s Skywriter. “I think the timing is right now.” Women have been largely ignored by the software producers, she says, and a result the retail avenues aren’t available.

Computer software stores carry few titles targeted at women because software for women doesn’t fit easily into software classifications. So the problem becomes, she says, where can women buy software products for women?

Toronto’s iFuture Inc. Seems to have solved that problem. They’ve taken their product directly to the Web and attracted a worldwide audience. Partnering with the world’s most widely syndicated astrologer, Toronto-based Eugenia Last, iFuture is the creator of AstroAdvice.com, an astrology website. Of its 870,000 users, 70% are female. AstroAdvice.com is the most recent incarnation of computer-based astrology products that have been in development since the early 1980s, and iFuture also maintains an e-commerce store on the site that sells astrology-related items.

Business is good, says Ted Kotschorek, president and CEO of iFuture. The site has a lot of loyal users and has branded itself to be one of the top astrology sites is the world, he says. Astrology is a popular topic, and it is even more so in the virtual world.

“When you introduce a truly innovative product—this frequently happens in the technology industry – you usually run into an issue with a number of folks, and what you have, if it’s truly innovative, could potentially be the basis for someone’s competitive advantage,” Katzman says.