Six (6) steps to finding relevance in any market
However saturated and intensely competitive a market is, every business can find its place. As Philip Kotler and Gary Armstrong, two prominent 20th-century marketing thinkers noted in one of their well-researched classic marketing works, buyers are ‘too varied’ and ever-transforming. The realization that these buyers prioritize different features and benefits offered by competing products yields exciting opportunities for businesses that are willing to narrow their product targets.
It is becoming increasingly evident that no business can appeal to all the buyers across all segments. While resources, skill-bank and finance, are relatively always limited, the market will always throw up new opportunities.
Procter & Gamble, for instance, identified some 11 segments and subsegments in the laundry soap market. For it not to yield costly space to its competitors it developed unique brands of detergents to cater to each consumer preference group it has identified across all the segments.
Why did the business take that approach? Every laundry soap buyer needs a good soap that washes well; Yet, different laundry soap users prioritize one or two other features as part of their fabric cleaning experience.
Precisely, aside from having their laundry soap perform excellently when applied for washing, some segments of users may want colour protection for their fabrics; others may value a nice-scenting fabric after wash. Some would desire a detergent that is mild enough to protect the fabric. Still, other buyers may simply prefer a detergent that is formulated for babies’ clothes and diapers.
The numerous buyers’ needs and buying practices yield precious opportunities for every business to capture a sizeable share in any market. However, this is only possible where each of the businesses is willing to concentrate its effort to meet the special needs and priorities of a narrowly defined buyers’ segment.
Set Godin who is a graduate of Stanford Graduate School of Business had rightly captured the present marketing mood. He said, “Everyone is not your customer”. That insight matches marketing consulting guru, Peter Drucker’s timeless nugget that reads like, “The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself”.
If a competitor knows the customers so well, another business can go a step further to research those set of customers, know them too well and make them a priority. Whatever the market situation, buyers’ benefits are endless. Facebook Inc.’s first app was doing well yet Tik Tok found a space to etch its relevance among teens who prioritize some other features which the over 3 billion-user app didn’t track so well.
There is a space for every uniquely conceived business in every market. The question of sufficient market size is a different case entirely. If a narrow segment is large enough to be considered profitable; it is an opportunity worth taking for any ambitious business. Besides, one of the easiest ways to ground business in the 21st century is to compete undifferentiated with other businesses. It is like a shark-fight in a pond – It always leaves every business involved hurt in the end.
Adopting these six (6) market segmentation, targeting, and positioning steps should help every business find its place in the current market:
Segment the market: The best approach at this level is to dissect the market by dividing it into distinct preference groups based on needs, characteristics, income, location and behaviours.
Develop a profile for each identified preference group: Each profile should specify the lifestyles and priorities of the group.
Develop measures of segment attractiveness: These measures often include the level of competition in each segment, the capacity and expertise of the business, availability of finance and materials; possibility for profitability based on market size, the location of the buyers, and the state of the economy. These are criteria that would determine if the business should proceed to the next stage.
Create products that appeal to the priorities of the most attractive segment: After evaluating the segments and their attractiveness, it is time to create suitable product or service that “fits (the narrow segment better) and sells itself”, paraphrasing Peter Drucker.
Develop appropriate positioning for the product or service: Positioning involves setting a competitive statement that clearly explains what the product and service offer that no other product or service offers.
Utilize the right channel for distribution of products and dissemination of communications: If the special buyers who need the product and service do not know about it, and cannot find it at the right point the marketing effort would have been at best wasted. Disseminating product education materials via the right media and placing the product and service at the most accessible channel for purchase is key to executing a market targeting plan.