The Marketing Guy

Rooting for Good Marketing Since 2009

What if your market is not really the market you’re in? What then?

With all the market upheaval and uncertainty right now, it seems as good a time as any to take a pulse check on defining your market space. With the pace of technology continuing unabated—now I can get a Google TV as of noon yesterday—markets that were seemingly well defined and understood can crumble instantly, bringing new competitors, but also new opportunities as well.

A great exercise for us marketers to do on a regular basis is to understand the market we’re actually competing in and define our competitors accordingly. That’s really step one. But step two is as important, and that involves defining the adjacent and tangential markets to yours, and figure out those competitors as well. We see this all the time in technology where a start-up company gets funding to solve a very specific problem. If it’s a big enough problem, they get competitors, and lo and behold, a market is created. Great. But as the market becomes more lucrative, bigger players think “hey, I would like a piece of that pie, and we do something kind of related to that market, so let’s get into that space as well.” Now the market isn’t just that one niche, it’s on its way to being a conglomeration of lots of things (i.e. search, movies internet, AND TV in the case of our friends at Google).

That’s actually how the enterprise resource planning, or ERP market came into being today. Take one process, start to tie a bunch of them together, from financials to the supply chain to customers to analysis and reporting—all of which were individual markets at one time—and wrap a big bow around it and solve the problem with one solution. Presto, you’re SAP or Oracle. And those examples are everywhere—any remember Lotus 1-2-3 and WordPerfect? It was Microsoft that tied everything together, and suddenly the market was spreadsheets, it was productivity, something they were well equipped to provide to a much larger marketplace.

There’s a great story from Jack Welch in his book “Straight from the Gut” that helps illustrate the point as well. As all good business students back in the 1990’s learned, Welch was fanatical at being #1 or #2 in every market in which GE competed. But as he cut non-performing units where he wasn’t the leader and honed in on the key areas where he was, he found his long-term growth prospects constrained. How many more refrigerators could he sell if he was already the number #1 player? But when a visitor to one of his management retreats told him that his market wasn’t refrigerators, it was household appliances, the light bulb (no pun intended) went off. Suddenly GE was no longer #1 or even #3 in the household appliances space—it was a whole new market for them to go after, with new competitors, and new opportunities. Suddenly it wasn’t as important to be #1 in the smaller market as it was to be #4 with a bullet in a market 10x the previous size.

The point of all this is that in whatever business you’re in, you can’t stay still. You can’t guarantee that other competitors are looking at the market in the same way that you are today. Your nice little niche business may be someone else’s feature set that comes free with proof of purchase. The key is to ensure your marketing is nimble enough to differentiate your product or service in the short term as markets continue to change, but can adapt quickly to the new reality of the competitive space you may find yourself in in the near future. It’s a tough skill to acquire, but the best marketers know not just how they can market a product today, but how to market the product when the entire perspective changes.

Advertisements

No comments yet»

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: