Growing in new markets
In our “know your market” article we covered the importance of understanding your marketplace. Whilst we are normally familiar with our “Comfort Zone” i.e. where we are already selling, if we want to break into new markets, the “Expansion Zone” it’s wise to do some homework first.
Large companies spend big chunks of marketing budgets on research which ultimately drives product development and business strategies.
Here we look briefly at four key areas
How big is the market?
Before investing, developing a new product or service, never mind the cost of marketing; You need to see if the there is a market for what you intend to offer and whether the market is big enough to make it worthwhile. This is not easy and it’s often got wrong. Experts didn’t see a need for tablet computers, Apple proved them wrong!
It’s wise to aim for growth markets, declining ones are likely to be crowded with pricing under pressure.
Test marketing is one way, doing a survey another or you could host some workshops.
What are the key needs?
To break into market, your offer needs to deliver something different or new; or have a better cost/benefit than existing players. It’s hard to make headway by offering more of the same, especially if you are unknown.
A different approach gets you noticed, again this is how Apple broke Nokias dominance.
The trap to avoid is to offer something just because it’s easy to do, rather than find out what people are looking for. Again workshops are useful to find out what potential customers are missing and the priorities of what they want.
How can they be reached?
There’s plenty of examples of good businesses and products that fail, because they fail to market correctly.
Breaking into a new market will cost more than maintaining your position in an established one. If you want to make a big splash, proactive tools such as traditional advertising and emailing will need to be used along with reactive tools like search (PPC). If your product is highly specialised, it’s important to know how and if it is possible to reach your market.
Don’t underestimate the work and therefore cost needed.
Are your products competitive and do they have the strengths needed to beat established players?
Arrogance must be avoided! It’s easy to think (and believe) your offer is better. You need to compare yourself to competitors from the buyers point of view. All too often, businesses think they know best! That a buyer will pay a premium because of feature X etc.
Reality is different, whilst some buyer’s decisions are driven by features, most look for a product that delivers what they need for a competitive price. It’s worth learning from the motor industry, offer a range of prices with different features and options.