In marketing it's important to know who you're targeting so you can find them and create your brand messaging around them. In some cases the niche is in front of your eyes - in others not so much. I'm specifically thinking of B2B or freelance work - imagine a designer, or a marketing expert - how do they decide who to market to? Every single industry/company size or pretty much every business could use their services.. but how do they pick a niche to focus their efforts on, if they've been basically been working with a really wide audience and filtering on the basis of budget (like most in these industries)?
Rule of thumb is to set your target profit/month.
Then niche down (tighter focus), till you have a niche small enough to dominate + large enough to produce your target profit/month.
Search Clarify for many other answers I've placed about using Meetup.com for this process.
If you get stumped, might be good to hire someone to assist you designing your niche.