Market strategy is one of those things even product marketers don’t always understand. Your Market Strategy outlines how you plan on moving from early adopters to more mainstream market acceptance. Walking some folks through my New Marketing Framework last week, it was clear to me that “Market Strategy” was not intuitively understood. Here’s a primer:
What’s Market Strategy?
Market strategy is your plan for how you are going to move from segment to segment to gain overall adoption and share in your market. In Geoffrey Moore’s Crossing the Chasm he describes how you move from early adopters to a mainstream audience through a “bowling alley” where you define a set of pins (niche markets) and as you knock over each pin (meaning you capture a significant share of that niche market) you can move on to adjacent markets. Your market strategy defines what your lead pin market is, how you will knock that pin over and then what adjacent markets you will go after next.
Why you Need a Market Strategy
You need a market strategy to help make sure you focus your (typically very limited) marketing resources on the things that are going to get you the most bang for your buck. I believe you need one for any product but it’s critical for products where the value of the product increases the more people are connected and using it. It’s also very important when you have a very new market and visibility (meaning how many people even know your solution might exist) is important for adoption.
What Does a Market Strategy Look Like?
Let’s say this is a few years ago and you are launching something like FourSquare. You decide that in order for the game to be interesting, a critical mass of your social network has to also be using it so it makes sense to roll it out in a geographical way. You decide New York will be your “lead pin” since you live there and you can get your friends and family using it. Once you knock that pin over it would make sense to knock over a pin where the social graphs intersect. That might be Boston (a lot of folks go back and forth between Boston and New York) or you might decide your user base is more young tech-savvy folks that are traveling to San Francisco a lot, so you pick that. You might then decide that you will roll out to a certain number of cities in the United States before you tackle anything outside the States. When you do decide to go international you might pick Toronto as a good first spot since it’s on the same time zone and those Torontotonians are batty for social media. Next you would hit the major cities in Europe. (I’m talking about this hypothetically, I know nothing about FourSquare’s market strategy)
Now in this case you might be saying – oh that’s obvious – it isn’t, especially for folks that are blazing a trail in new markets. Watching Groupon expand through cities organically in the U.S. and then through acquisition in Europe, you can see this isn’t the only way they could have expanded. They could have offered more than one deal a day, they could have started doing deals that weren’t solely for local merchants. They could have, but that would make Groupon a very different company.
A B2B example might look like the more traditional vertical market bowling pin strategy similar to what we used at Janna Systems. We started with Investment Banking which naturally lead to Private Client Services, Retail Banking and eventually beyond traditional financial services to Insurance and beyond (we got acquired before we had a chance to knock over too many of these but trust me there was a detailed market strategy). The key is to make sure that your pins are related so that awareness, word of mouth, customer examples, etc. can travel with you from one pin to another and you aren’t in essence starting from scratch in a completely new market.
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Great write up! I find myself in the same position educating my clients on the value of the marketing strategy. I believe trying to implement an overall marketing plan without a strategy tied to the business plan can result in a performance that may be lackluster.
My favorite line: “Aim at nothing, you hit it every time”.
Thanks for sharing
Hey Sandy,
Thanks a lot for the comment. Startups in particular are often really short sighted which is OK but it isnt an excuse for lack of focus.
April
RT @aprildunford: What's Market Strategy and Why Should you Care? http://bit.ly/bkk0LQ
Great Analogy April. Thanks!
In my comparatively short yet interesting career so far, I have dealt with numerous decision makers who refuse to have the patience required to nail down that first pin before moving on to the next. I’m a huge believer in being highly targeted in developing an organization’s marketing strategy… specially given the fact that usually, different segments have very different cultures and often times behave and interact quite differently amongst their communities. The bowling pin analogy is definitely something I’m going to incorporate into my own vocabulary to help explain the need to be targeted and focussed.
Also have a question for you.
I don’t understand why organizations treat their digital strategies differently from the process they follow in developing their overall marketing strategy. At the end of the day, the process should be exactly the same and digital activities must be complimentary to the achievement of overall objectives. Maybe the hype around digital media needs to die down a little before people start paying more attention to the basics again?
Hi Ujwal
Thanks so much for the comment!
I think the best digital marketing happening right now is part of a broader campaign or strategy. The problem with digital is that it’s really different from other forms in some ways and that (I believe anyway) is the reason some marketers are trying to do separate things there. It’s true that it’s different – social media engagement is NOTHING like advertising and requires a much longer-term focus for example, however having social media as some sort of silo that is separate from your other marketing efforts is a huge mistake. It’s marketing’s job to sit down and figure out what the goals and strategy are and then build a set of tactics that help get the company there. Digital is one of many tools in the marketing toolbox to accomplish the goals. Having the tools dictate strategy is a bit like having the tail wag the dog – it doesn’t make sense.
April
This is a great article. I know you were using the geographic markets as an example, but it actually made me think about using that for my own startup – and it’s something I never thought about doing before. Regardless, I will definitely have to think about which niches I want to go after first, second, third, etc, more carefully.
I wonder – how do you know if a given niche is a “good enough” market segment? For example, the geographic niche seems very well defined, but what about other niches that are more vague?
Hi Amber,
Thanks for the comment!
Picking target markets is hard work but there are usually some easy things you can do to figure out the lead couple of pins. If you are out in the market right now, you should talk to your existing customers to get clues about who it is that really loves (not likes LOVES) your product. It’s always best to establish a beach head in a market you already understand and you feel confident needs and likes what you do. These could be defined by geography, by market vertical, buy business problem, by company size, or by just about anything. In the companies I’ve worked with recently some of the segments that folks were targeting were:
1) IT departments of mid-sized companies in North America with 50-1000 servers to manage.
2) Industrial designers in north america
3) Parents of children under the age of 6 in Canada and the U.S.
4) IT departments of Canadian Government organizations
5) Event planners in Canada and the United States
6) Facebook users with more than 100 friends
You get the idea. The more specific you can be the better, just don’t make it so small that you could knock over the pin by closing a handful of deals.
April
Blog Post: What's Market Strategy and Why Should you Care? http://bit.ly/bkk0LQ #marketing #prodmgmt
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Nice! Made me comment 🙂 RT @aprildunford: Blog Post: What's Market Strategy and Why Should you Care? http://bit.ly/bkk0LQ
Nice detail for looking at Market Strategy, esp. for start-ups – I really like what you’re doing with the RW Market Framework (as a Pragmatic Marketing alum myself)!
Decision-making for building and refining the market strategy, as well as the business strategy, for any company usually will benefit from continuous market intelligence programs/processes (this aligns to an extent with market knowledge in the RW Framework). The strategy needs to be revisited and fine-tuned *repeatedly* in response to market, customer, industry, and competitive landscape changes over time. In the software industry – my world – “over time” is very quick-paced. Market intelligence recommendations are useful supplements when performing “analysis and optimization” phases too.
Hi Julie,
Thanks for the comment! I agree with you on that. A market strategy is not something you get to set and forget about so you need to have ways that market feedback gets collected and fed back into the company. In the framework I called that “customer learning” but it probably should be called “market learning” because it’s broader than just existing customers.
Thanks!
April
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RT @aprildunford: blog post: What's Market Strategy and Why Should you Care? http://bit.ly/bkk0LQ #prodmgmt #marketing
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[…] Market Strategy – The market strategy is a higher level view of how the company plans to scale in the market from early adopters to a broad market, including the segments to be targeted and in what order. (in Crossing the Chasm, this would be the description of your lead pin and the adjacent pins) […]
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