Marketing does not work on formulas

differentiation, Marketing, Positioning, Product Management, segmentation

I have the biggest challenge with people who use spreadsheets to work on a target and then break it down with formulas. If marketing or product management was so formulaic, no product would ever fail.

If you check my team also, you will find them telling you that my fundamental question is “Why will it happen”

Spreadsheets are very good, especially for making lists and milestones. However assuming that the market you operate in will behave like a formula in the sheet is fallacy and targets will never be met.

The reason for that is markets and customers have a mind of their own. As I have mentioned earlier also marketing is applied psychology.

While the demographics and psychographics will list out typical characteristics, each of these people in the B2B segments, operate in an environment, where they interact with different functions. Each function has different priorities.

Unlike the consumer market where the risk is low for most of the items, when it comes to B2B technology products there’s a lot of perceived risk and people don’t like to change the status quo.

Since technology changes so fast one of the first inertia points for the customer is – am I investing in the right technology, how will it impact my other operations. Then come other questions like, what if it doesn’t work, what if this company sinks etc.

For the product management folks its critical that they take into account all these inertia or resistance points. Think through as deeply from the customer’s point of view, write an autobiography of the customer.

You can’t do this if you take a broad spectrum of the market. That is why it’s important to identify a niche in the market and then a market in the niche. Then actually go out and meet customers and understand all the reasons, why they won’t buy, then continuously improve your offerings.

Never rely on spreadsheets to govern the actions for your product but use them to govern the milestones.

Till next time.

Carpe Diem!!!

Selecting a Niche – Part II

differentiation, Marketing, Positioning, Product Management, Sales

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.

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!!!