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.