Posts Tagged ‘catergory’

Competition is the creation of buyers. It is The Truman Show of the marketplace. The buyers are the show’s producers; your company is Jim Carey’s Truman.

Truman’s fans adore him. His producers and sponsors need him. Everything depends on Truman believing that his fabricated world is real.

It’s easy for Truman to comply because in his TV world actions seem to have real consequences. Same for sellers. Effective prospecting leads to presentations. Thoughtful presentations lead to full-scale proposal pitches. Nailing the pitch often leads to a win.

As with Truman’s daily travails, the euphoria of success and the anguish of failure effectively mask the truth: Your company’s real potential has been subordinated to someone else’s plotline — a handful of functional criteria that were written long before you and the other actors showed up.

If you’re tired of their fabricated reality, you can break out. You just have to be willing to walk off the set. Life outside the show’s construct is risky, as Truman’s self-serving producer warned. But it’s also more rewarding.

If you’re not doing a Voice Of The Customer (VOC) project, you should. Just be careful how you use what you learn.

Don Draper said it back in 1964, "A new idea is something they don’t know yet. So of course it’s not going to come up as an option." — Mad Men, Season 4, Episode 4

Using VOC to benchmark how well you are meeting expectations is a fine practice — for operations. However, using VOC as input for designing new products or services is the beginning of the end.

Why? In VOC, customer wants and needs are defined in terms of satisfaction with current alternatives. When customers tell you what’s good, what’s bad, or even what’s missing from your product or service, their answers are bounded by their alternatives. You can ask “blue sky” or “magic wand” questions all day long, but if it doesn’t exist, customers can’t want it.

It’s natural to want to listen to what customers ask for and give it to them. It seems predictable. And because of its origins in QFD, it’s defensible. Just don’t expect it to produce anything innovative.

Instead, recognize VOC as a potentially commoditizing force. By the time your new product or service is launched, it will look even more like your competitor’s. After all, they are listening to the voice of the customer too.

We talk to people all day long about marketing. Sometimes these conversations start off a little confusing or disconnected — like we’re talking about completely different things.

So I looked it up. Wikipedia defines marketing as “the process of selling or promoting products to customers to further enhance sales.” No, that’s sales promotion.

If you take away just one thing from this site, let it be this definition: “Marketing is the deliberate and systematic attempt to own a market.” Boom. That’s it. Now we can have a productive conversation.

Well, almost. We’ve put a few more important definitions together in our
How To Go To Market primer.

I was having a heated discussion (and a few margaritas) with dear friend about the merits and perils of entering a category after it has fully formed. On one side, you have the opportunity to be a fast-follower. On the other, you can just as easily become a failed-follower. In the end, I believe there is nothing inherently good or bad about being a late entry, provided you position yourself according to your timing.

Almost every product or service exists in a category along side similar products or services.  Just as products have a life-cycle from introduction to discontinuation, so do categories. The goal of positioning should always be a move toward category dominance (Technically, that’s when your product has twice the market share of any competitor).  Your positioning strategy should be guided by the timing of your entry into the category.

The following illustration shows the relationship between positioning strategy and timing. I’ve borrowed the adoption life-cycle curve from Geoffrey Moore’s Crossing the Chasm. It describes the number of new buyers entering the market for products in a category — not the lifespan of the category. (A category can go on for decades even if no new buyers are entering the category.)

On top of Moore’s lifecycle curve, I’ve overlayed four different positioning strategies — each coinciding with a specific point in the category’s maturation.

A new product can be launched (or repositioned) in a category at any point in the lifecycle.  How you position the product should be based on when it’s launched.

Market-forming strategy:  A useful definition of a market is “a group of people with a common problem who reference each other.” A market forming strategy identifies groups of people who don’t yet realize they have a problem and may or may not yet reference each other, but they have the potential to come together around an innovative idea and form a market — e.g, FedEx or Starbucks.

Category-creating strategy:  Most new products are clumsy, incomplete, flawed in ways that contribute to their getting stuck in what Moore called the Chasm.  If the shortcomings are real, a second-mover might exploit them and turn a quirky technology with limited appeal into a significant new product category.  I can think of no better example than the iPod. It isn’t just an mp3 player: along with iTunes and the iTunes Store, it’s an entire personal music system, the like of which never before existed.

Benefit-surfacing strategy:  Once the category has caught fire, you can’t expect to get in front of it without offering a fundamentally different reason to buy.  Amateur golf was enjoying a surge in popularity about the same time Callaway introduced the Big Bertha.  While other clubs touted distance and control, Big Bertha offered forgiveness — exactly what the amateurs needed, even if they previously didn’t realize it.

Delivery-differentiation strategy:  New products can be launched even when the category is fully matured and the number of new buyers is waning.  But the focus needs to shift from the product to the way it’s delivered. Laggard buyers often lag because the product benefit doesn’t outweigh the hassle of getting and using it. This is not the time for a faster, better, cheaper product; but faster, better, cheaper system for acquiring and using it.  In other words, Amazon.

Late in the lifecycle, new benefits and even better delivery systems tend to take a back seat to price.  The goal should be to so significantly change the user experience that it’s no longer comparable to its original category.  For example, Miller Lite is not a beer; it’s a light beer.