How well do you know your customers and your target markets?
If there is an opportunity to enter a new market, you will want to have a solid information base. Firstly, the maturity of a market influences how you approach it and how to position products and services against the competition. Competitive positioning is also the basis for your market strategy and serves as a compass for future marketing and sales activities.
Is your market actively seeking solutions to problems, does your product or service solve them?
Understand how your customers and prospects work to solve their problems. The goal is to know what your potential customers think and solve their problems with a tailor-made set of solutions. Objectively look at your market and look at your customers' problems and how valuable they are to you.
A crucial element of your positioning strategy is how you deliver value at the highest level. For example, value can be delivered through operational excellence or customer intimacy. Think about what customers value most when they buy from you and focus on that value.
Is your market growing, stable or shrinking?
Without reliable market data, it is not easy to understand the exact positioning of new opportunities. Consider the most critical factors in the lifecycle of your market, such as market size and propensity to buy. Determine the external factors and trends that will affect the market alongside any growth potential.
You need as much numerical market data as you can find, and you need a clear picture of the life cycle of each of your direct and indirect competitors, as well as your indirect and direct future competitors. It is crucial to understand the life cycle of the market and current trends and be aware of your industry and market trends.
A good positioning strategy requires careful evaluation and market research.
A detailed competitive analysis gives you a clear picture of where you stand in the market and where your customer acquisition is gaining ground. Clearly understand who your direct and indirect future competitors are and who they will be. Analyse the top five using set criteria that will give you an objective view of the market. Include an understanding of how your competitors add value to the market. Try to be as neutral as possible.
Just as the perception of the market changes, so can your product or service change. It is not uncommon to transfer certain mindshare that is currently owned by one company to another. If you have not yet decided which mindshare you want to own, it is helpful to display your positioning on a map.
Your competitive position can define how you differentiate your offer and create value for the market. The types of analysis described above will provide you with a solid base of information that you can use when deciding whether to seek a new market, as well as deciding on your competitive position. The aim is to clarify your business model, customer base and potential market for your product or service.
The above will also allow you to clarify your strengths and challenges to overcome the competition in your market. Consider these issues carefully (i.e., do not overestimate your differentiation based on small product features that markets do not recognise) and the growth potential. By quantitatively analysing the need in any new market alongside an analysis of your existing customer base you will find out how to interact with and engage new customers.