“A niche market is a small group of customers who share a characteristic that makes them receptive to a particular product or service. This characteristic may be no more complicated than the fact that they fancy a luxury chocolate every now and then.

Launching a product into a niche market is far cheaper than launching a mass-market product. Potential customers are easier to identify and to target. Niche markets often develop as a subset of mass markets (the market for invalid cars, for example, or for left-handed oven gloves), and mass-market manufacturers sometimes choose to launch niche products as well. Chrysler, for instance, manufactures the Dodge Viper, a niche vehicle that sells in extremely limited quantities to hard-core motor enthusiasts. Fiat produces the Ferrari.”

Read this article from Economist.