I was watching Shark Tank a little while back . There was this young lady who came with a business model which she called as an Ed-Fintech model and she started rattling some numbers from different global agencies on why they are in such a good space. They had not even started on revenue.
What happened – young person, giving “gyaan” with no revenue – suddenly with every statement that she made, most of the “sharks” pounced on her.
Problem perception- those sitting on the other side of the table thought she was acting as a “know-it-all”. They felt she was arrogant and that hurt some egos. No one ended making her an offer. From her perspective maybe she was just being confident with the research that she had done. Net outcome no investment
I remember about 25 years back there was a Korean company called Daewoo which entered India and launched a sedan. It was an extremely well engineered car which the Indian market had not seen till then. Now some of the early users of the car did not understand the way the fuel gauge was calibrated and they got the impression that it its a fuel guzzling car.
That perception got created with some users but the competition took advantage of that and blew it out of proportion. Eventually the car was a huge looser and whatever forecasts were made went south.
As a product manager or a marketing manager you have to keep an eye on the perception that is getting created and handle it, because once its made, it is not easy to brush off and it becomes reality.
Till next time then.
Joe Polish has this wonderful example of a kaleidoscope and telescope. If you look into a telescope you can zoom into a specific object and identify this out it.
On the other hand if you look through a kaleidoscope, you see a lot of beautiful patterns but you can’t find one specific thing to focus on. As you keep rotating the kaleidoscope the patterns keep changing and keep mesmerizing you, diverting your attention from good pattern to the next.
When you niche, you not only find what you need to focus on, but you also find what you don’t need to focus on.
As marketers we are always seeing opportunities like the patternsin a kaleidoscope. A marketer is fundamentally positive by nature and therefore see opportunities all the time. This however is the downside for us, it tends to distract us.
By creating a niche and sticking to it, you put the blinders on for everything else. Then your messaging to your audience improves, you are able to identify all the different nuances for the audience and therefore slowly start owning the space in the mind of the customer.
Once you can own the space that’s when the game starts and you make profits.
Till next time.
These parts on marketing are short because I like to get a bite size idea across in the time while you wait in the line at Tim Hortons or Starbucks – max two minute read.
In the first post on this topic, I spoke about why perception about your product or service can make such a big difference in the premiums you command and the profitability you can make.
In the second post I wrote about the downside of taking a position in the market especially when there’s a major technology shift – from horse carriages to automotive.
One of the key agendas of marketing is to attract customers to you. But there’s an unsaid implication in that statement.
Marketing should help you attract the customers you want and repel those you don’t want.
Like the red egg above in the picture, people who don’t like to have red eggs will get repulsed by it and will not buy it. However the people who love red eggs will go to any length to get them.
You may sell a much smaller volume than the white eggs, but you could be making much larger volume. So many iconic brands like Harley Davidson, Apple, don’t have a large market share in terms of volume but they lead in terms of profitability.
Whatever perception you want to create however cannot be at the cost of the quality of the products or services. Good marketing is not a substitute for a poor quality product.
If you have an excellent quality product or service and then you choose a narrow market and create a perception of being different then you can take home a much higher profit.
Till next time.
One of my early bosses gave me a mantra – in marketing perception is reality.
Once a perception has been created in the minds of people its very difficult to dislodge it. I was giving an example of doing pricing, to a new entrant into my product management team. How based on the perception that has been created for the brand it can command a premium pricing
This discussion actually started on what’s the right way to do pricing. One method that is simple to use is Cost ++.
However the market may find that very high on one extreme of the spectrum or you may end up leaving money on the table at the other extreme.
That’s when I gave her the example of how a washing machine brand which has German origins is able to command almost 70% higher premium in the market because of the perception that the German brand would have better engineering and quality.
Some people also tend you the word Positioning in lieu of Perception. There are some semantic differences but at a broad level they are similar
There was actually a very nice book by the name Positioning by Jack Trout and Al Ries. If you’re in marketing or intending to get into marketing this is one of the books you definitely need to read. This book gives a phenomenal number of examples of how once a positioning of a brand has taken place in the minds of people its very difficult to dislodge it.
A few days back I wrote about differentiation. When you differentiate your product or service you work to create a different perception or position in the minds of the customers.
Till next time.