Growing the business in a niche

differentiation, Marketing, Positioning, Product Management, Sales

One of the biggest arguments that I hear against identifying a niche is “How will we grow and adrress the full market”

First trying to address the “full” market is a fallacy. Its not ever feasible….but we will address it in a separate post.

For this post let’s keep our focus on the niche you have and how to grow it.

We will take 2 examples – one from the low value “eggs” that we had touched earlier and another from the IT services segment which is B2B and ultra high value.

This topic will be carried over multiple posts, because any product management process will need to go through multiple steps to make it successful in the market. The logic will hold whether you are selling financial services or consumer products or technology services

The assumption over here is that you have a ” Market in the niche” . If you are reading my blog posts for the first time, I would suggest you look at my previous posts where I give a detailed explanation on this topic.

The second assumption is that you have a very good product or service and you can differentiate it in the market.

The third assumption is that you have analyzed and seen that there’s what Dan Kennedy used to call a “Hungry Crowd” or a market for your product or service.

So if you are trying to sell eggs in a locality which is predominantly populated by vegetarian people , then however good your product is, you will never be able to grow your business because there are not enough people who eat eggs. So there will hardly be anyone willing to eat a “red” egg ( see my previous post on this red egg example)

With the above 3 assumptions in place, it means you have been able to identify your market, identify the niche in the market and size it.

From the next post we will start looking at making an entry into the market and growing it.

Till next time.

Carpe Diem!!!

Perception- III

differentiation, Marketing, Positioning, Product Management, Sales

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.

Carpe Diem!!!

Perception – II

differentiation, Marketing, Positioning, Product Management

Yesterday I spoke about the advantage of creating a Perception / Position in the mind of the customer and how a clear positioning can help you get premium.

Since my focus is on Product Management in technology products and services, within Marketing, I always like to focus on the differentiation and positioning one can create for the product.

There are an immense number of examples I will share with you on this in the future posts, showcasing how technology products/services own a category.

This post however looks at the downside of creating a strong positioning.

Once you take the position in the mind of a customer, it becomes very difficult to change that perception.

If we look at history Digital Equipment was the company which was positioned as the “mini” computer company. When the mainframe computers were associated with the IBM’s of the world Digital created a perception of being different with a “mini” computer. DEC PDPs were the computers which any company longed to own. They owned the Mini Computer category.

DEC however no longer exists today. The reason for that is – DEC was the MINI Computer company. When computers became personal, people didn’t associate DEC with that market and they got completely annihilated.

When you own a product category and the technology related to that category is nearing “end – of – life” then it becomes very difficult to migrate into a different category. This happens because of 2 reasons in my opinion:

Internal – the management of the company still tries to push their existing products/services because the are incentivized on pushing that.
External – because the position you hold is strong in the minds of the customer – they can’t see you in a different position and don’t believe you have those capabilities

Most managements don’t read the writing on the wall, some read it but are not able to take a tough call.

For a marketer, its a double edged sword especially in the technical world where the technology is changing so rapidly. Should they work and put the effort into creating and owning categories or should they be a generalist and try and attract everyone.

I will still place my bet any day on creating a positioning / perception/ differentiation so that your product/service can stand out and customers see you defining that space. Then making a sale become easier, making profits become easier.

There are other aspects to creating the differentiation which we will take in future posts.

Till next time.

Carpe Diem!!!

Perception

differentiation, Marketing, Positioning

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.

Carpe Diem!!!