In marketing, a niche refers to a service or product that's a special area of demand. It is that small corner in the market that accounts for a certain kind of specialty concerning an un-met customer need. To be able to attract a strong, solid market, the choice of niche products must ultimately complement your website theme. It is this way that you can generate a specific market for the niche product you are trying to sell.
--Interesting Side Note--
In ecology, a niche refers to the place or position occupied by an organism or a population within an ecological community called the ecosystem. It's the term which defines the role the organism or the population plays in the general scheme of things. The niche an organism or population holds is the one responsible for dictating the ability of the species to survive. It is the one which determines whether an organism or a population will perish or thrive.
--End of Side Note--
Niche marketing is the process of finding market segments that are usually small but potentially profitable nonetheless. To maintain a profitable quantity of sales, this marketing strategy relies on increasing the loyalty of customers so that their corporate objectives will be met or surpassed.
Illustrative of this is the fact that the quality of the product or service sold will deliver customer satisfaction and, consequently, customer loyalty. The result is profitability derived from a solid market base that trusts in the ability of the product or service to really deliver.
One of the great things about niche marketing is that it encourages those who indulge in it to be unique, "one-of-a-kind". Here one is not forced into the lion