THE MARKET

Wedging Into a Market

New product or service
Parallel competition
Franchising

New product or service

§Truly innovative products are rare
§Innovate with a modified product, service or technology
§Success comes from being first with the best
§Watch out for “me-too” competitors => defendability

Parallel competition

§Find a market which is not satisfied by current product or service offerings
§Provide an improved product (not merely copy an existing competitor)
§Seeking opportunities in parallel competition:
-Competitors who only believe in their own products; slow to incorporate other innovations
-Too much emphasis on technology means a competitor may not be providing what the customer wants
-Competitors only service certain niches; other customers left out
-Current competitors provide mass services to everyone; opportunity to serve a niche.

Franchises

§Take a proven business formula and expand it
§Business advantage usually comes from geography and being able to deliver great service
§For the franchisor, franchising is a way of increasing distribution
§For the franchisee, franchising is a way to lower the risk of a new business

Market Size

§Think Big, and try to find lots of applications to your product.
§Once you have thought big, make sure you segment properly
§A Rs 200 million market? How does it break down?
§Market segmentation is the process of dividing the total market for a good or service into several smaller, internally homogeneous groups.
§Segmentation is necessary because customers in a market have:
-Differences in buying habits.
-Differences in the way the good or service is used.
-Different motives for buying.
-In short: different needs!

Markets are segmented by:

§Intuition based on experience and judgment.
§Mimicking competitors and earlier market entrants.
§Performing a structured analysis that includes:
-Identifying the current and potential wants that exist within a market.
-Identifying the characteristics that distinguish segments.
-Finally, determining size of segment and how well it is being satisfied.

Positioning

§Positioning is the act of designing the company’s offer so that it occupies a distinct and valued place in the target customers’ minds.
§Usually the “-est” of something. Everyone remembers the first or best of any accomplishment.

Differentiation

Developing a number of meaningful and valued characteristics of the product offering that distinguish it from a competitor’s product.
§Find A Valuable Niche

§Differentiation
§Can anything be differentiated?
§Is there such thing as a commodity?

Differentiation – Product
§Form
§Features
§Performance
§Quality
§Conformance
§Durability
§Reliability
§Repairability
§Style

Differentiation – Service
§Delivery
§Installation
§Customer Training
§Consultation
§Sales support
§Promotional tools
§Repair
§Other Services?
-Loyalty programs
-Warranty/Extended maintenance

Differentiation – Other
§Image
-Symbols, brands
-Media
-Atmosphere
-Events
§Personnel
§Channel