One of the core (and first) considerations determining the structure of your marketing strategy is whether there is actual demand for the types of product or services you are looking to provide. Is there an established industry; a market for your products/services? Can its size be measured? If so, how big is it?
Even if there may not be explicit demand for your product, there may be demand for tangential services that you can latch onto and harvest. If there are ‘hand raisers’ in the market who are seeking to solve a certain problem, and there is a channel that you can use to satisfy this demand, you will be ‘pulling your audience in’’. If not, you will be operating a push-led strategy (i.e. you will be pushing your message to the audience).
This is a simple distinction, but it is a critical one — and it determines how difficult it will be to achieve your objectives. Selling a product to an unsuspecting and uninformed audience is an uphill battle. On the flip side, satisfying needs and wants in a mature market is, in many ways, an easier battle — yet, bear in mind that this is a road well-traveled. Established players have paved the way, and you will be following down a busy path.
The Market: Entering vs. Creating a Category
Convincing a market “why they need something” is a costly endeavor. One of the most fundamental questions when defining a marketing strategy is just how much demand there is. Generating demand for a product or service is entirely possible, if:
the offering latches onto an outright consumer problem
the offering is a substitute to an existing product or service
the campaign or product is absolutely stellar!
Depending on the market scenario (i.e. demand vs. no demand), you will face vastly different challenges. Although there are benefits from the novelty of operating in your own exclusive category — creating that category is not easy. Also, what many marketers fail to factor in, is that a successful new category never remains exclusive for very long.
Market Size
Start-up founders and marketing managers alike will inevitably find themselves needing to produce an estimation of the market size. These estimations are always fluffy and imprecise. If you are tackling an established industry, chances are there will be data, benchmarks and studies available. If you are creating your own category or you are working on a novel concept, you will have to use panel studies, demographic data and pilot tests to determine the size of the market. In other words, you will have to generate our own primary data.
You need to be able to size up the opportunity to seize your greater business opportunity. If the potential audience is not meaningful in size and scope, it doesn’t matter how effectively you put together the rest of your marketing strategy. How many relevant target customers are there out there? How many of them can I realistically win over? What is the retention rate I can expect from my customers? What is the total addressable market; i.e. the revenue at hand in my target market: simply put, how much money is there to be made?
What was the value of the goods/services sold last year, for your specific industry?
Achieving Product-Market Fit
Product-market fit is a straight-forward, yet often poorly defined concept in the marketing field. In the simplest terms: It is the degree to which a product satisfies a relevant and strong market demand.
Many marketing strategies were originally centered around finding the product-market fit. In a slower moving world, a static, definitive fit might have actually existed — but that is no longer the case. Interestingly, in startup and entrepreneurship literature, this concept has yet again become a buzzword. Today’s businesses and consumers are all far more interactive than those of the pre-internet era. Coupled with this, time horizons are compressed, marketers face shorter product life cycles and consumer trends emerge and disappear ever more quickly. The product-market fit doesn’t stay nice and snug for very long.
There are many ways to perfect a product-market fit, without necessarily altering the target audience or making adjustments to the product itself. Some of those ways include re-evaluating the product attributes you emphasize and the price point. Speaking of the price point, there are two critical points to fully understanding product-market fit and how it pertains to your greater business.
One can’t stress enough the importance of what you are optimizing the product-market fit for.In one way or another, you are optimizing the fit for the total revenue at hand; in other words, you have to take into consideration the size of the target market you can attract, the value your service delivers to it, and the ideal price point that maximizes the two.
Secondly, and less intuitively, if you are a business offering a broader suite of products or services, you need to understand product-market fit on a business level. A strategy frequently employed by mature businesses to intentionally underprice your products to ‘draw in’ customers into your marketing funnel (for further upselling). In such cases, you are not optimizing your fit for profit at the product level — but rather at the business level.
Lastly, it bears repeating that the product-market fit is not a static one. Much like with anything in the marketing strategy realm, achieving product-market fit should be seen as a process, where the factors at hand are ever-changing.
Segmentation
Many marketers begin the market research process by slicing insights up into dimensions, such as geographical location, demographics, psychographics, behaviours and benefits. Then they subsequently analyze each ‘slice’ and weigh them against each other in order to determine which markets to pursue.
As we will see, the function of segmentation is to achieve a closer product-market fit, by compartmentalizing similar customers and interacting with them in a more tailored and specific fashion.
Such analyses might have one day been the norm, but they are no longer as relevant nor useful as they once were. In today’s digital economy, markets no longer fall into uniform, neat compartments. In other words, your target consumers may be scattered across a number of geographic locations and your customers will come in many colors. In other words, the markets in which you operate are no longer divided by obvious national boundaries.
There may also be distinguishing audience features that are not easily discovered by traditional market research. For instance, market maturity and consumer sophistication might be some of them. Whereas in one market, consumers understand the core concepts at hand necessary to promote your product, other markets may be less informed as to the concepts and the value from a certain product category.
Target Audiences
So how should you approach the market? Should you break your target audience up into several segments? Should you pursue the market as one monolithic audience? These are questions that you have to ask yourself when creating a marketing strategy.
First off, consider how their needs will vary:
What are the underlying factors that will drive behaviour?
What are the characteristics that will determine and predict sales?
What are the primary trends impacting our industry?
We want to identify audience-specific trends factors and purchase predictors. The next question becomes: In how much detail do we need to define our target audience?
Here, you need to think in terms of accessibility. If you can’t compartmentalize your target markets and target them individually, segmentation is not as powerful. In other words, if you can’t target and speak to the various segments individually, there is far less need to break out those segments.
Substantial in size (large & profitable enough to serve)
Accessible (within reach of proposed communications/sales channels)
Unique (substantially significant from other segments)
As you can see, segmentation can be done in many ways, and the market sliced in many ways. With technology, it is possible to place users in ever-smaller buckets and message to them in more tailored ways than ever before.
For instance, we can isolate 18-35 year-old males with certain interests, and transmit a tailored message depending on whether or not they have purchased a specific product before. We can, if there is good reason, take this elastic approach to a number of segments using a so-called micro-marketing strategy.
Lastly, you want to think in terms of clear, sizable slices, starting with the most obvious and straight-forward customer types. You do not have to have multiple segments for the sake of it, as this can serve to multiply the complexity of your marketing activities greatly.
Personas
Working out target customer personas is a useful exercise because it can help improve the way you solve challenges for your customers. Personas enable you to truly speak to your target audience by providing a composite sketch of each person in the segmented market.
It is recommended that you make three to five personas to represent your audience; this number is big enough to cover the majority of your customers yet small enough to still carry the value of specificity. Many persona templates include the same basic information; who the person is, what they value, and how best to speak to them.
Basic Marketing Persona Template
Name of the persona
Job title
Key information about their company (size, type, etc.)
Details about their role
Demographics
Age
Gender
Salary / household income
Location: urban / suburban / rural
Education
Family
Goals and challenges
Primary goal
Secondary goal
How you help achieve these goals
Primary challenge
Secondary challenge
How you help solve these problems
Values / fears
Primary values
Primary fears and objections
These items are course, neither exclusive nor exhaustive, but serve as examples to get you started.
We use cookies and analyse traffic to this site. By continuing to use this site, closing this banner, or clicking "I Agree", you agree to the use of cookies. Read our privacy poplicy for more information.
