A suitable market and a sales & marketing strategy, the 2 key elements in Factor 2, the Marketing. Whilst intrinsically linked they require different skills, choices, and approaches.
Establishing a suitable market should be based on research, a lot of research…. get it right and it will steer your entry and future promotion into the market and ensure all your decisions are shaped for who you are targeting.
Which brings us to the ‘marketing plan’, the marketing plan should contain 3 things: 1. How will your business enter the market? 2. What will drive an increase in market share? and 3. What activities will be used to establish your brand?
Identifying your market
Having a well defined, thoroughly researched target market is more important than ever. Markets are becoming more and more saturated which is great for consumer choice but more challenging for business. The need to identify underserved niches for your products and services has become an essential activity.
The following 7 steps will help market assessment and this framework will provide the foundation information needed to create and execute a successful marketing plan. Please note these are not sequential steps a need to be done in parallel.
Demographics & Segmentation, Considering the following is a good starting point: Industries, personas, potential Volume & Value, Market size, list these and research the answers for your product.
Industries, firstly identify your industry and then the industries of your customers, a full list of industries can be found here or you can research Google to your heart’s content. Once you have a list of industries select a primary one to be your first approach and maybe a few secondary ones and go from there. If you know your long term plan the creation of a roadmap of which industries to focus on and when can be created.
If you are targeting end-users rather than B2B then it is still a useful exercise to do but just identify the industry of your business, not your customers.
Personas are about the individuals who will play a role in using, specifying, buying of your product or service
Firstly identify who will be
- The End-user – the role or individual that will ultimately use it
- The Specifier – the person who specifies what is to be bought
- The Decision-maker – the ultimate authorizer who will sign off the purchase
- The Purchaser – who will actually buy the product
Each one of these roles will have a stake and differing drivers, they may well be the same individual or multiple individuals depending on what your product is. Consider the 2 examples below
A child’s bike
- End-user is a child, a boy or girl of a particular age
- Specifier possibly the child but could also be the mum or dad
- Decision Maker, in my family that would be my wife, the mum but could equally the dad.
- Purchaser, maybe the mum or dad but it could also be a grandparent, family member or friend.
A CRM System
- End-User would be sales and marketing teams
- Specifier would be CRM manager, IT teams, end-users, management, etc
- Decision-maker could be the IT executive, CEO, or senior management
- The purchaser could be in the procurement or buying team
It’s important to ensure you understand everyone who will be involved in the buying cycle and map out as much detail about them as possible, you can find some useful tools to help here https://www.contentharmony.com/blog/customer-persona-tools/.
Market size, market size is the overall value of the market, there are many resources out there to understand a market size google being the first place to look or you could invest in more accurate answers with analysis companies but I recommend getting an estimation first. This figure will then be refined in potential size & value to establish an addressable market for your product.
Potential Size & Value, finally as the name suggests, what is the potential for your product, how many customers are realistic and what would the value of these customers be to your business. Consider the following
- How big is your target segment
- Number of customers available
- How crowded is the competition
- Realistic conversion of customers
Useful article here https://www.entrepreneur.com/article/270853 to provide more in-depth approaches to this
Target Customer, Identifying the type of customer within industry or market is required, this will also help shape the Potential Size & Value, so if you’ve done this already revisit it to ensure it aligns with the output of target customer. Below is a mix of customer types and approaches to consider
- Customer Size
- Qty of employees range
- Turnover range
- Persona type
- Premium focused
- Discount driven
- Impulsive influenced
- Wandering browser
- Loyalty focused
- Cost driven
- Value based
- Technology Oriented
- Brand focused
We also have a tool which can help here segment your potential or existing customers which can be downloaded from our resources page or directly here
The aim is to create segments categorized into the effort, potential value and segment size
- Effort – this is the level of service required to realize the value
- Potential Value – what realistically can your business convert
- Segment Size – total available value to all businesses present in the segment
- Target Zone – High Value but low effort, Customers here are the rich pickings but beware the market could be crowded, if you find an underserved niche here you’re on the right track
- Premium Zone – High value but high effort, service will be critical in addressing this area but maybe less crowded due to the effort required to convert
- Danger Zone – Low value but high effort customers, is critical to understand whether/how your business can approach, however it unattractive to the competition.
- Commodity Zone – Low value but low effort, Typically have relatively little needs & low potential so will require a suitable business model to approach.
- Sphere Size – Consideration of larger markets should also be considered particularly within premium/Target if the effort can be reduced
Market Need, Establishing what your niche is to be is a key objective. Some of the questions to ask are; what are the market or competition gaps, what unique value will the product or business bring, what is the underserved need.
Here are a couple of similar 5 step approaches to help identify your niche
Competition, Understanding a markets competitors, who and how many of them there are, their position and positioning in the market, what are their USP’s, their strengths and weaknesses. An underserved market can take very little in terms of innovation and capability to get off the ground, reciprocally and over-served will need uniqueness and most likely innovation.
The following tool can be used to help understand some of the landscape and identify opportunities.
- Rivals – look at what these competitors are doing and why they are not winning, the answer to this will help to provide the answer to the value needed.
- Contenders – Consider competitor capability/value particularly if their win rate can be reduced through enabling your own ‘value’ improvements
- Ankle Biters – Competitor capability/value within this segment should be driving influencers when making decisions on products or services
- Emergents – have relatively little influence on sales but watch what they are doing as they will be your immediate competition when you first enter the market as you will be one of them (also consider revenue size though)
- Sphere Size – Consideration of larger competitors is also important particularly within Contenders/Ankle Biters
Barriers to Entry, The first thing to consider here is, a barrier to you is a barrier to everyone else, and if you are able and capable of overcoming the barriers, the more opportunity will arise. So do not avoid barriers, find a way to break them down. Typical barriers might be Investment, Technology, Brand, Regulation or Location.
One barrier which is often overlooked is culture, ensure you fully understand how your product will be received culturally, the last thing you need is to overstep cultural norms or cause offense.
Regulation, Legally essential, so ensure you do your due diligence here, they have to be abided too. As with Barriers, regulation can be an opportunity, highly regulated markets, and industries are hard to get in but once in the opportunity is rich.
Strengths, Weaknesses, Opportunities, and Threats
The final step is to combine all this into a usable format, and SWOT serves this well. SWOT, or strengths, weaknesses, opportunities, and threats
Start by populating opportunities and threats these should all fall out of your research into regulation, barriers to entry, competition, market need, in fact, all of the above. Opportunities and threats are external factors’
Once completed, look at the internal factors, this is your ability to service opportunities and threats. Categorized into your strengths and your weakness.
You can find out more about SWOT here
Entering the market
Build a plan, the previous section goes into a lot of detail and if done right it will drive your plan of entry. Having a market entry strategy detailing the who, what, where, when, why, how and how much will serve a smooth launch.
Prior to entry, build awareness and trust within your potential customer base, use the full extent of your marketing capability to do this. IntelligentCX refers to the huge benefit of using ‘pull marketing’ to effect change in a market. Pull marketing is the art of drawing customers to you through providing them something they want in return. Typically at no cost and in most cases information in the form of content blogs and whitepapers or resources and tools which provide value or solve a problem.
Have your website up and running way in advance of the launch of any products or even before building anything. Do not mention any products or services coming soon, position your website as the go-to place for information. Start to build present your brand as an influencer around the subject matter your product will be part of, essentially, all you need is a blog, email subscriber list, social media, and a small marketing budget. Then write content, rich content and lots of it that highlights the pains you will be addressing or the missing value you will be provided with your product when it’s ready, but still, do not mention your products.
Over time the website will build up a network of people who are interested in your product or rather what your product will do for them before they even know you have a product. The result, when your product is ready…. you have a ready-made list of potential clients to market too and the best part is, they will all have the trust of your brand and half the battle of selling to them is addressed already.
Pull marketing can be used very effectively prior to any product sales to build an audience. If you want a ready-made primed customer base before any product or services is released, consider this as part of your launch strategy.
We will have much more on this in future articles.
Increasing Market Share & Establishing you Market Brand
Increasing market share should be an extension of your market entry plan which in turn should have drawn from your market identification work, and so you’re getting everything right and it’s just a matter of keep doing what you’re doing, right? Well maybe….
Increasing Market Share and Establishing your market Brand go hand in hand and Innovation is key. All business must keep changing and adapting to their plans. Innovate with your product, your commercial model, your pricing, your niches, your content, your services, and anything else you can think of. Just look at amazon the ‘book’ store they’ve come along the way using this strategy, books, and just about anything you can ever think of, but then there are the services, IT capability, marketing capability, warehousing, hardware and so much more.
Some useful further reading here
And here on some more traditional approaches to this activity
Factor 2, the Market, uses the phases below to aid identifying a target market, defining how to will enter the market, grow market share and establish a brand
- IDENTIFY Market
- ENTRY into the market
- Grow MARKET SHARE
- Establish BRAND
Once you have read through these venture on to the other Factors as they will all provide information on how to address and answer some of the questions posed here in addition to providing inspiration on different approaches. Alternatively, you can find more articles on the subject of the Market by using the tags ‘Factor 2’ or ‘Market’.