Bayer dominates the aspirin market, so Tylenol came out with something that works too, but contains no aspirin. Add as much value as possible. If there are dozen cleaners within a five square block area, then your cleaners should be the one, which picks up dirty laundry from your customers' homes. Advertise your niche as much as possible and add qualifiers to your general business description. If you only have one thing that separates you from the rest of the competition, then that should be the first thing out of your mouth when talking with potential customers.
Bottled water is a great example.
Whenever someone sees your name or logo, they will read your statement and know what you stand for. Research, research, and more research. Yes, it's often viewed as a painful and laborious task, but it must be done - you can either take the time and find your niche soon or go through years of refinement before you hit the jackpot. Finding your niche doesn't always happen on the first go round either, even with all the research in the world. There are some people who have become millionaires because they invented a great product by accident.