ideas to income: an introduction to marketing

Ideas to Income An Introduction to Marketing

MaRS Entrepreneurship 101 January 14, 2009 Lecture 1 & Workbook Slides

Peter EvansAdvisor, MaRS Venture Group [email protected]

Copyright 2008 – Peter Evans - www.linkedin.com/pub/0/192/665 pg 1

Peter Evans

Peter Evans advises entrepreneurs and high growth companies in a range of technology markets, specializing in strategic planning, research, product management and channel development. He brings to MaRS over 15 years experience working in early-stage venture-backed technology start-ups and publicly traded companies in the software, Internet services, online media and telecommunications sectors.

Previously, Peter worked in major accounts sales, product management, research and senior marketing roles with organizations such as Sympatico, FloNetwork (acquired by DoubleClick in 2001) and PlateSpin Inc. In his role as a consultant since 2003 he has worked with over 100 clients throughout North America from early stage ventures to large corporate clients such as TELUS, CNW Group and DoubleClick in the US (just prior to its acquisition by Google). An angel investor in a number of early-stage startups he is has served on a number of boards including Sitebrand (Ottawa), XPLANE Corporation (St. Louis) and the Toronto Venture Group. His community contributions include fundraising and educational work with organizations such as the National Ballet School, Junior Achievement and seven years serving as a Big Brother with Big Brothers of Metropolitan Toronto.

A noted speaker on strategy and marketing he has spoken at major conferences throughout North America and Europe in addition to being a guest lecturer on marketing at UofT and Queen’s. He was educated in cognitive psychology and telecommunications management at the University of Toronto and Ryerson University and holds an MBA from Queen’s University. He is currently completing the Certificate Program in Strategic Planning & Innovation at the M.I.T. Sloan School of Management.

Advisor, MaRS Venture Group [email protected]


What’s on for Tonight

  What is Innovation?

  What is Marketing?

  Why Marketing Matters?

  The Problem with Ideas: “The Innovation Paradox”

  Step by Step overview of how a marketing as a system of STRATEGIC activities can transform Ideas to Income

  Our Approach: –  Key Marketing Principles/Frameworks –  Best Practices (Examples) –  Workbook Sections for Reference) –  Take home exercise (fun for the whole family)

Session Learning Objectives

Goals   Learn some key marketing

and strategy concepts   Be able to apply them

to an invention or idea   Have a deeper respect

for marketing as a discipline   Have Fun


What is Innovation?


Innovation is Good Wikipedia Says So

INNOVATION [in-uh-vey-shuhn n]

a new way of doing something. It may refer to incremental, radical, and revolutionary changes in

-  Thinking -  Products -  Processes -  Organization


10 Types of Innovation

1.  Finance/Business Model - How you make money 2.  Networks and alliances - How you join forces with other companies for mutual

benefit 3.  Enabling process - How you support the company's core processes and

workers 4.  Core processes - How you create and add value to your offerings 5.  Offerings - Product performance How you design your core offerings 6.  Product System - How you link and/or provide a platform for multiple

products. 7.  Service - How you provide value to customers and consumers beyond and

around your products 8.  Delivery Channel - How you get your offerings to market 9.  Brand - How you communicate your offerings 10.  Customer Experience - How your customers feel when they interact with your

company and its offerings

It goes way beyond science & technology

1.  Finance/Business Model - How you make money 2.  Networks and Alliances - How you join forces with other companies for

mutual benefit 3.  Enabling process - How you support the company's core processes and

workers 4.  Core processes - How you create and add value to your offerings 5.  Offerings - Product performance How you design your core offerings 6.  Product System - How you link and/or provide a platform for multiple

products. 7.  Service - How you provide value to customers and consumers beyond and

around your products 8.  Delivery Channel - How you get your offerings to market 9.  Brand - How you communicate your offerings 10.  Customer Experience - How your customers feel when they interact with your

company and its offerings Source: Doblin – Division of Monitor


Innovation is…

creativity fused with process that transforms.

income +

positive social

change

ideas


Innovation is…

creativity fused with process that transforms.

income ideas


What is Marketing?


Marketing Definitions

“Marketing is the activity, set of institutions and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners and society at large.”

AMA (American Marketing Association)

“The management process responsible for identifying, anticipating and satisfying customer requirements profitability”

Philip Kotler –Author & Professor of International Marketing

Kellog School Of Management, Northwestern University

How the professionals describe marketing


STRATEGY PRODUCT MANAGEMENT

SALES R&D SERVICE FINANCE Legal

Where Marketing Fits Within the Business Functions of a Company

SALESFORCE INTEGRATION

MARKET MANAGEMENT

MARKET RESEARCH

PARTNERSHIPS

HR MARKETING

IDEA INCOME


PROMOTION Sales promotion strategy,

advertising, publicity

The 4P’s as a Framework

PRICE Pricing strategy, cost accounting,

price setting research

PLACE Distribution channel strategy,

distribution merchandising

PRODUCT Product strategy, “needs”

research, development pllan

A simple linear view of the marketing process


Benefits of Marketing

Customers   Establishes your relevance/credibility with the right first customers

Product   Clearly identifies problems and critical transition points and guides the

development of the right prototype and product

Markets   Creates a more predictable and scalable go-to-market process and alignment

with the right segments

Investors

  Provide a common framework for understanding key areas of the business that affect success. Shows how a company can grow and make money on a sustainable basis

What’s in it for start-ups?

✔

✔

✔

✔


Why Marketing Matters Its in the numbers…

Average Slides 15 in an Investor Pitch Deck

50% More than

are marketing related


1.  Company Overview & Vision 2.  Management & Advisors 3.  Customer Problem 4.  Market Opportunity/Size 5.  Solution 6.  Benefits/Value Proposition 7.  Success to Date (Customers/

Partners/Patents)

8.  Competitive Advantage/ Intellectual Property

9.  Category Map - Where our Solution Fits

10.  Competitive Advantage (Value Matrix/Value Curve)

11.  Business Model

12.  Marketing & Sales (Customer Acquisition/Sales Cycle)

13.  Financial Projections (3-5 Yr.)

14.  Financing Requirements

How an Investor Sees Marketing Investor Presentation: Table of Contents


1.  Company Overview & Vision 2.  Management & Advisors 3.  Customer Problem 4.  Market Opportunity/Size 5.  Solution 6.  Benefits/Value Proposition 7.  Success to Date

(Customers/Partners/Patents)

8.  Competitive Advantage/ Intellectual Property

9.  Category Map Where our Solution Fits

10.  Competitive Advantage (Value Matrix/Value Curve)

11.  Business Model

12.  Marketing & Sales (Customer Acquisition/Sales Cycle)

13.  Financial Projections (3-5 Yr.)

14.  Financing Requirements

How an Investor Sees Marketing Marketing is threaded across the venture


So What Happens when Marketing

Gets it Wrong?


Reasons for Market Failures

Failure to clearly identify and focus on: 1.  Market Category – Addressable Market

2.  Target Customers – Problem you solve

3.  Competitors (Current and Future) – Who Else is Working on this Problem?

4.  Product Strategy/Positioning – Your Unique Approach

5.  Pricing structure – What End Customers and Channels will Pay for the Product

6.  Distribution Model - Direct or through Partnerships?

7.  Revenue Model – How you Make Money (Partnerships/Licensing)

The 7 Deadly Sins


And it’s getting even tougher to

compete these days…


Nobody is Safe Anymore Even some of the most established companies are under seige


But does Marketing REALLY Matter?


YES


Because


Because…

Marketing helps get you to FCS


And…

Nothing really happens until somebody gets to FCS


WT* is FCS ?


=


First Customer Sale


Yay !


But here’s the bad news


:-(


Most Sales Don’t Close


Why Most Sales Don’t Close

No Pain   No Goal = No prospect

  Critical points of pain or key business issues are necessary to initiate a search for a solution

No Value  Goals should be related back to $$$

 Tangible value propositions provide a means of reducing price pressure i.e. Reduced cost, increased revenues, higher customer satisfaction/lower churn etc.

No Power  Power buys from power

 While end-users and influencers are fun to sell to they have not have the authority to buy

 Ultimate decision-makers may have different goals (points of pain)

No Solution  Feature/Function discussions are

useless unless put in context of the customer’s pain

 Solutions must be created in the prospects mind through careful, methodical diagnosis

Here’s where the process breaks down


Back to the Drawing Board

problem the


Ideas Don’t Have Market Context

idea (n.) i·de·a*

  a form, look or appearance of a thing as opposed to its reality.

  a conception existing in the mind

  a thought, a mental image, a notion

  an opinion, view, or belief

  a groundless supposition; a fantasy

  a hazy perception

  a vague impression, fanciful notion, inkling

Source: Random House Webster's Unabridged Dictionary

Even Webster is pessimistic


We have an Innovation Paradox

Product Company Business Science Technology

Source: Neoset Ventures

Not all technologies can spark the creation of a business


Market Problem Buyer Budget

The Market is Not your Customer


People or organizations with needs and budgets are…


Transforming Ideas to Income

Market Opportunity Value

Proposition Financial

Model

Science Technology Company Business Product

Market Problem Buyer Budget

1 2

3

4


4 Key Areas of Focus

Distribution Strategy

Can we about marketing as

as a of activities?


Transforming Ideas to Income Another way to think about marketing in a strategic context

SCAN 1

2

4

5

(Markets)

CONFIGURE (Internal Capabilities)

3

1. Markets

2. Customers

3. Suppliers, Partners Networks

4. Competitors

5. Financial Engine


Looking at Convergent Themes

1. Create

2. Capture

3. Sustain

Markets

Search Technology

A free search engine + a paid (Cost-per-Click) ad model


Eliminating Unrecoverable Cost

1. Create

2. Capture

3. Sustain

Customers

MP3 Standard

Apple focused on what buyers really hated about buying music


Leveraging the Ecosystem

1. Create

2. Capture

3. Sustain

Partners & Suppliers

CRM Platform

Salesforce.com went beyond SAAS to Software Syndication


Delivering Unexpected Value

1. Create

2. Capture

3. Sustain

Competitors

Virgin is opportunistic & aspirational in building its brand


Tuning the Financial Engine

1. Create

2. Capture

3. Sustain

Financial

From simplified logistics to fuel hedging Southwest stays on top

Too many to mention !

Too many to mention !


SCAN 1

3

2

4

5

(Markets)


1. Scan Category: Market

Goal: Look for Convergent Themes to Discover new Markets

Key Questions:

  What market category are you pursuing?

  Are you creating a new category?   How big is it?   Do buyers have industry context to

make a decision?


2. Filter Category: Customer

Goal: Eliminate Unrecoverable Costs

Key Questions:   Who is your customer?   What problem do you solve?   How do you know it’s a problem?   How much will customers pay to solve the problem?   How did you decide on pricing?

SCAN 1

3

2

4

5

(Markets)



3. Synchronize Category: Suppliers, Partners & Networks

Goal: Leverage the Ecosystem to help deliver a better, faster, cheaper solution

Key Questions:   Who has the power to get you to your target customer segments?   What degree of influence do key suppliers have on your ability to produce your solution?   How can you best approach the market opportunity (Direct vs. Channel)   Are there syndicated networks you can use to sell your product?

SCAN 1

3

2

4

5

(Markets)



4. Amplify

Goal: Deliver Unexpected Value that Competitors Can’t Match

Some Focus Areas:   Who is your competition? What are their strengths and weaknesses?   Apply the concepts in Step 2&3 to strip out unrecoverable costs that customers do not value. Can you delight customers on elements of the product/service where quality can be raised or new elements can be created to develop a sustainable advantage?   Can you demonstrate thought leadership in the category and use it to evangelize through industry opinion leaders?

SCAN 1

3

2

4

5

(Markets) Category: Competitors



5. Tune Category: Financial

Goal: Optimize revenue and costs

Key Questions:   What is your method for capturing revenues (product sales, royalties, licensing advertising supported)   What are the total costs? - professional services, sales engineers etc.   Any upfront payments or recurring revenues? (maintenance, upgrade revenue sources)   Do partners need to be paid? - Sales Channel – Direct, Distributors, VARS

SCAN 1

3

2

4

5

(Markets)



Market


Social


$0.01 $0.10 $1.00

$10.00 $100

$1,000 $10,000

$100,000 $1,000,000

$10,000,000 $100,000,000

$1,000,000,000

1959 1969 1979 1989 1999 2009 Source: Hans P. Moravec 1998-2003]

Dol

lars

per

MIP 10x reduction every

4.25 years

10x reduction every 7.5 years


Enviornmental


SOURCE: NVCA / Thompson Reuters Exit Poll SOURCE: NVCA / Thompson Reuters VC Fundraising Q3

Total economic value created by VCs.

Total amount of money raised

by VCs.


  Revenue Growth

  Competing against time

  Revolutionary Technology

  Horizontal Market Expansion (for Breadth)

  Transaction-Oriented Sales (Buy what I have)

  Tin-Men (Horizontal Orientation)

  Volume Oriented: Telesales/Cold-Calling

  Poorly Defined – Non-Integrated Island

  Features Development

  Info. Overload

  Cashflow

  Competing against inefficiency

  Evolutionary Technology

  Vertical Expertise (for Depth)

  Consultative Selling Approach

  Sales Strategists (Vertical Expertise)

  Exec. Referrals (3-Degrees of Separation)

  Accountable & Aligned with Sales

  Focus on Relevance…not just Differentiation

  Less is More (Contextual/Diagnostic SalesTools), Thought Leadership through Research

Corporate Goals

Technology Buyer Focus

Technology Positioning

Market Segmentation Focus

Sales Approach

Salespeople

Lead Generation Strategy

Marketing Dept. Role

Product Management Focus

MarCom Focus

Then Today B2B Tech.


Visual Recognition Systems

What We Can Learn from the Movies The power of convergent metaphors

Digital Signage

GPS Location-Based Services Technologies

Pay as You Drive Insurance

Social media (blogger) performance monitoring) Reputation Management

for UGC

Public Opinion Measurement Software

Brand Reputation Management

Gesture Based User Interfaces “Edutainment Software”

Who Cares? Emerging Category Emerging Technology


Category Mapping (CleanTech)

Source: Greentech Media (2007)

Understanding how the sector forms into “microclusters”


Market Sizing

Market Total Revenues Expected Market Share

Projected Company Revenues

Automotive $60 billion X 0.1% $60 million

Aerospace $40 billion X 0.1% $40 million

Healthcare $30 billion X 0.1% $30 million

Food Service $30 billion X 0.1% $30 million

Total $160 million

This is NOT a Believable Revenue Forecast


Customer


Technology Creates Market Disruption

  Technology keeps getting better. In every market, technology advances and improves and is driven by a set of behavioural, economic, regulatory and institutional factors. Companies take advantage of this by offering better products at higher prices, and by listening to and targeting mainstream and high-end users.

  Customers will use a technology, up to a point. Technological progress inevitably reaches a point where it's far above what customers actually need and can use.

  Overshooting customer needs enables disruption. When the level of technological progress is far above what customers actually need and can use, the phenomena of overshooting creates the opportunity for an upstart to come in with something that's cheaper, simpler and good enough for a set of customers who don't need the advanced technology.

  It's not really about technology—it's about the business model. Small, nimble, disruptive firms can succeed with business models that are unattractive to incumbents.

Clayton Christensen sets out 4 rules that govern disruptive innovations:

Some of the Golden Rules


Critically Assessing your IdeaTo drive customer relevance

  What are you best at that no one else is? How does that “translate” to proposed customer benefit? –  Underlying Innovation – product – solution

  Why should a customer care? –  How much better than current technology/product/solutions

  Which markets desperately need you? –  Urgency over “nice-to-haves”

  What buyers must have your solution? –  This is a realistic forecast number

  What problems do you solve? –  How do customers talk about the problem? What is their point of view?

  What is the real (loaded) customer cost to buy the solution? –  Time & resources to deliver and implement etc.


Developing a Value Driven Strategy

The Most Important Equation You Should Remember

Copyright 2008 – Peter Evans - www.linkedin.com/pub/0/192/665 pg 72 KW-025

Average Value for

Quality Buyers

Average Value - “Stuck in the

Middle”

Superior Value via

Higher Quality

Average Value for

Price Buyers

Superior Value via

Lower Prices

Maximum Buyer Value

Inferior Customer Value (Over-priced or Over-specified)

Higher

Parity

Lower

Lower Parity Higher

Relative Quality

Relative Price

Minding your P’s & Q’s What’s YOUR Strategy for Adding Value for Customers?


Segmentation Model (AMD)How Microprocessors Cluster on Key Consumer Dimensions


Customer SegmentationThe Most Important Research You Can Undertake

  A Segment is a Sub-Set of Buyers: –  Within a market who share similar needs –  Demonstrate similar buyer behaviour

  Emphasis is on identifying clusters of buyers who are: –  Attractive –  Unattractive –  Non-addressable

  Good Segmentation Reveals Clusters that satisfy the following criteria: –  Identifiable - The differentiating attributes of the segments must be measurable so that

they can be identified –  Accessible - The segments must be reachable through communication and distribution channels. –  Substantial - The segments should be sufficiently large in order to justify the resources required to

target them –  Unique Needs - To justify separate offerings, the segments must respond differently to

the different elements of the marketing mix –  Durable - The segments should be relatively stable to minimize the cost of frequent product changes


Where are you in the Buying Cycle? There are rules to how markets adopt technology

Source: Moore (2002), Crossing the Chasm: Wiefels (2002), The Chasm Companion


Getting Caught in the Chasm

  Adventurous

  Early buy-in attitude

  Think “big”

  Independent of the “herd”

  Spend first

  First use capability

  Think Pragmatists arepedestrian

  Prudent

  Wait-and-see

  Manage expectations

  Part of the “herd”

  Spend next

  Staying power

  Think Visionaries are reckless

Visionaries vs. Pragmatists

Pragmatists don’t trust visionaries as references


Marketing to Buyers in Organizations

Features Seymours

  IT Manager

  Marketing Manager

  Director

VITO’s

  CEO/President

  Executive Director (Assoc.)

  Executive VP (Industry)

  COO/CFO/CMO

Functions Users

  Salesperson

  Clerical Staff

  Database Admin.

  Call Center Sales/Support

What to ask:

What are you using for a system now?

How are you using it?

Any serious problems?

Who’s who in the org.?

What to ask:

What are the technical criteria?

How much? How long?

How big?

How would you design the perfect solution to this problem?

What to ask:

What are the specific goals for your organization over the next (quarter, year?)

What new markets is your organization looking to grow in?

What are the criteria for establishing a business relationship?

Benefits

Parinelli’s Influence & Authority Network


Analyzing Customers

Key Questions to Ask… 1.  What Experience do they have? 2.  Who do they Report to?

3.  What are their Responsibilites? 4.  What Motivates them?

C-Level

VP-Level

Director

Manager

Vertical

User

Finance HR Ops. . Marketing

Horizontal

X

Photonics

Robotics Pharma

.

Spatial

Government

Medical Devices Academic

Use this guide to better understanding buyer orientation

X

X


Case Study


Where are all the Flying Cars?


They Have been Working on Other Stuff More features … Less Function…and a bailout package


Is this a Reasonable Request? The Innovators are working on it…sort of

Taylor Aerocar: 1949

Moller Skycar: 2008

General Motors: Early Prototype?


Ouch !


Assignment for Next Week’s

Lecture


Q1. Why are the

flying cars not taking off ?


Bonus Round Q2.

If we were to ask the right questions to PROFITABLY REDEFINE the category of

“personal aviation” what would they be?


Hint. Go back to the slides

and think about MARKET TRENDS + what

CUSTOMERS (really) want!


Send your responses to

[email protected] by 9am Jan 24th, 2008


Worksheets

Work

shee

ts

Establishing Target Markets


Identifying/Sizing your Target MarketTarget Market Criteria

Size

  The estimated size of the market to determine whether or not it is worth going after. Beware of “top-down” sizing

Expected Growth

  The size of the market may be small, but if it is an emerging market that is growing significantly it may be worth going after

Competitive position

  The less competition the more attractive the market

Cost of reaching the market

  Is the market accessible to you?

Compatibility

  Is it aligned with your objectives competencies & resources


Creating a Category MapHow do you stack up on key factors that drive value

High

Low

Low High Ease-of-Use

Performance

Competitor 1

Competitor 2

Competitor 3

You?

Competitor 4


Seg

men

t A

Seg

men

t B

Seg

men

t C

Seg

men

t D

Seg

men

t E

Seg

men

t F

Seg

men

t G

Market Size [$] $.6 B $1.2B $5.0 B $.16 B $1.5B $0.3B $0.2B

Value Chain Ownership 1 5 8 6 3 2 1

Market Potential $ $0.2B $75M $10M $35M $80M $15M $10M

Time to Market [years] 4 2 1 3 2 4 7

Barriers to entry [#] 6 2 2 5 4 3 9

Differentiation [#] 7 4 5 4 3 5 9

Competitive Threats [#] 2 2 2 4 7 4 2

Investment required [#] 6 5 3 7 9 5 9

Segment Scoring Try to rank various market segments using this scoring model

Work

shee

ts

Market Research Methods


Secondary Research

  Information provided by third-party sources (may be syndicated “shared” content)

  Information has been gathered from previous market research

Advantages –  Ease of access –  Lower Cost –  Less time consuming

Disadvantages –  Information may not be exactly what is

required to assess new markets –  Results may be out-of-date –  Research design may be poorly constructed

Secondary Marketing Research A Starting Point

Sources   Consulting firm research

Reports

  Government reports and statistics

  Newspaper articles

  Web-based articles, reports, etc.

  Census reports

  Trade magazines

  Scientific and trade journals

  Libraries and resource centers

  Books on the industry

  Published reports and studies


Primary Marketing Research4 Types of Research Design

Qualitative (Focus groups, In-Depth interviews)   Used for explorative purposes

  Small number of respondents

  Not generalizable to the whole population - statistical significance and confidence not calculated

Quantitative (Surveys and Questionnaires)   Generally used to draw more conclusions and tests a specific hypothesis

  Uses random sampling techniques

  Infers from the sample to the population - involves a large number of respondents

Observational (Product in-use Analysis, Empathic Design)   Observational research that employs a process of watching—without interfering

  Concentrates on viewing the customer doing everyday activities in their own environment

Experimental (Purchase Labs, Test Markets)   Researcher creates an artificial environment to try to control spurious factors, then manipulates

at least one of the variables

1

2

3

4


Customers

Telephone Surveys

Online Surveys

Focus Groups

Demos.

Custom Panels

Clinical Trials

SME Interviews

Market

Trade Shows

Trade Assoc. Statistics

Government Reports

Media Monitoring Economic

Reports

Syndicated Research

Competitors

Patents

SME Interviews

News Scanning Services

Advertising & Speaking Employee

Blogs

Websites

Getting Customer/Market Data A Qualitative & Quantitative Research Checklist

Work

shee

ts

Evaluating Customer Requirements


Where are you in the Buying Cycle? Can you identify what group of buyers you are addressing?

Source: Moore (2002), Crossing the Chasm: Wiefels (2002), The Chasm Companion


Segmentation VariablesHow does your market cluster on these key segment breaks

Consumer Characteristics (Partial List):

  Geographic: Region, city size, metropolitan area, density

  Demographic: Gender, age, race, life stage, birth era, residence tenure, marital status

  Socioeconomic: Income, education, homeowner,

  Psychographic: Personality, values, lifestyle, status

Buying Situations (Partial List):

  Outlet type: In-store, catalogue

  Benefits sought: Product features, primary motivation

  Product Usage: Usage rate, awareness and product knowledge

  Behaviour: Involvement in purchase decision


Qualifying your Sales Prospects

Customer’s Pain Qualified   No Goal = No prospect

  Critical points of pain or key business issues are necessary to initiate a search for a solution

Value has been quantified  Goals should be related back to $$$

 Tangible value propositions provide a means of reducing price pressure i.e. Reduced cost, increased revenues, higher customer satisfaction/lower churn etc.

Buyer Has Authority to Proceed   Power buys from power

  While end-users and influencers are fun to sell to they have not have the authority to buy

  Ultimate decision-makers may have different goals (points of pain)

Solution is Understood  Feature/Function discussions are

useless unless put in context of the customer’s pain

 Solutions must be created in the prospects mind through careful, methodical diagnosis

Have you addressed these key areas in the sales process?


Pricing ResearchWork through these areas before you set your price

  What’s your fundamental strategic model? –  Premium Price (Product Leadership) –  Lowest Price (Operational Excellence) –  Blended Model (Customer Intimacy)

  What is the Method for Capturing Revenues –  Product sales –  Royalties –  Licensing –  Advertising supported

  Some other Factors Need to be Considered –  What are the total costs? - professional services, sales engineers etc. –  Upfront payments or recurring revenues? (maintenance, upgrade revenue sources) –  Do partners need to be paid? - Sales Channel – Direct, Distributors, VARS


Some General Pointers   Beware of OVERESTIMATING your market forecast - Especially if you are not

in an established market category   Ironically, it can be much harder to compete in a market where there are no existing competitors - Why? You

are competing against “non-consumption” - Customers lack points of reference that can serve to validate their need for your technology

  When assessing market opportunity don’t overlook the benefits of market research   Good market research mitigates risk. Besides interviews with current and prospective customers,

make sure to review reports or interview key technology analysts and other Key Opinion Leaders covering your space.

  Remember…Differentiated Technology is NOT Enough   Market relevance is more important than ever in identifying a target market. Look for

“necessary“ product/service requirements that have not been satisfied by competitors.

  Look for Areas where you can deliver UNEXPECTED value   Design your product and service on key attributes of value that amplify the impact you make

with reference customers. The trick to building market share is to over-deliver in areas that matter most ….and leaving the things that don’t matter to competitors.


Here’s More…

  Understand your VALUE DISCIPLINE: How you can best create value in a market vs. your competitors   Clearly understand how your competitors create value - Is their product best in class? Do they lead with low-

price? Or are they customer intimate with a highly specialized product for niche segments? What room have they left you to exploit the market through a different approach?

  Draw a category MAP to better articulates how you fit vs. competitors and other product/service substitutes   A category map that defines your product/service and competitors across key criteria is critical to providing much

needed context to potential buyers

  Identify how you add to the “Customer’s UNDERSTANDING of the Problem at Hand”   Do you have a diagnostic process that guides prospects through a method of determining and quantifying the

impacts on their organization? Does this also translate tangibly into financial measures?


And More

  Remember Points of Pain for Customers VARY greatly within the Same Company –  Understanding the prospect’s Vertical (C- Level, Director, Manager, User) and Horizontal (Functional - Finance,

Operations, IT, HR) Orientation is critical to mapping out points of pain correctly.

  Identify the optimum point of entry - It’s often NOT the VITO on the first call –  While it’s important to get to the VITO (Very Important Top Officer) don’t overlook the need to research their

agenda with subject-matter-experts who are lower in the organization (often a best point-of-entry is the sales dept.)

  TRIANGULATE with your Competitors to Float the category ! –  Gaining an understanding of the marketplace by just checking out competitors’ websites is an inexpensive but

myopic approach to benchmarking who you are up against. Supplement your research with regular competitor meetings where your share a little about what you know about other competitors - and get a lot in return.


Getting Started GuideIf you want to get going keep these steps in mind

Market Dynamics

  Why is this a good opportunity now?

Market Sizing

  Market Prioritization and Rationale

  Review your total market and industry dynamics

Customer Insights

  Select segmentation criteria

  Divide relevant market into customer segments

Target Market

  Describe each customer target group

Competitors

  Evaluate competitors for partnering options or exit possibilities

Conduct customer interviews, focus groups, discussions with experts, etc…

Look at customer trends, regulations, technological advances

Look at analyst reports and do “bottom-up” analysis…not top down

Run some estimates of potential market share, sales volumes, revenues, and profit (under various funding /resource /partner scenarios)

Develop a meaningful category map that spatially compares competitors on key factors for creating value.

ideas to income: an introduction to marketing

Business

peter evans

marketing matters

marketing denitionshow

peter evansadvisor

product management

ideas income copyright

senior marketing roles

product system