What is a potential disadvantage of targeting a niche market?

Targeting a niche market allows a business to focus on a specific segment of consumers who have particular needs or preferences. However, a significant disadvantage of this strategy is limited growth potential. Niche markets are typically smaller compared to broader markets, which means that the number of potential customers is restricted. This limitation can lead to challenges in scaling the business, as achieving significant revenue growth becomes more difficult. While a niche market can lead to specialized products and loyal customers, the overall size of the market may not support extensive growth in sales volume, preventing the business from reaching the levels of profitability that might be achievable in larger, more diverse markets.

In the context of other options, high sales volumes are generally not associated with niche markets due to their smaller size. Greater competition may exist in broader markets rather than in niche ones, where fewer competitors might be focused on serving the same specific audience. Lastly, targeting a niche often means that brands can create strong consumer awareness within that narrow market segment, rather than facing issues of low visibility.