In the first post on Selecting a Niche – I spoke about Selecting a niche in the market and finding a market in the niche for your product. In Product Management this is like the fundamental step for you to look at
While one of the reasons of selecting a niche is to be able to differentiate, the other reason is to avoid the big players who are already present.
Its not a good idea to be a better Honda or a better SONY or any other market leader. They can be a better themselves by themselves and they have the marketing and financial muscle to outlast any competition.
When selecting a niche you should be looking at a market which is big for you, but not big enough for the market leader to be bothered about that small market, that it puts its energy in competing with you. So a convenience store like Seven-Eleven has a niche where it charges the prices it wants and is profitable. It does not try to compete with the Walmarts of the world.
Given what I mentioned above – the size should be large for your capability (market in the niche) but should be small enough for the leader to ignore (niche in the market). Then you start differentiating. The kind of products and product packs that are available in a Seven-Eleven will not be found in a Costco or a Walmart.
And you will know you are being successful when people start comparing their offering with yours or as the late Dr Sean Stephenson used to say “Anti-Fans” start talking something bad about you and customers will call the category by your product/service name. Once that happens, you will polarise a certain section of the market to always keep coming back to you and your selling costs will come down and your profitability will go up.
At the end of the day the job of a person in product management is to ensure that she can create a category which she can own with her product
Till next time.