UNDERSTANDING YOUR TARGET MARKET
… IT'S THE KEY TO SUCCESS!

In recent years we have been involved with many client engagements helping solve some pretty basic marketing problems. In most cases, it involves successful companies introducing a new product or a new service, usually to a vertical market that has not been their traditional marketplace. Most of these companies have been in business for some time and know their industry quite well. When they have taken this new direction, their traditional marketing processes and techniques do not seem to be as effective as in the past. What creates these problems? And how are they best addressed?

In most cases there are a variety of reasons for these problems, mostly having to do with their marketing process and internal procedures. Perhaps immediate business needs or short-term objectives begin to take priority over properly understanding this new target market. For example, it is very common for a high technology company with technology-based-products and services to be enamored with how fast the technology can spin or how high it can jump. This consideration replaces more customer centric priorities. Surprisingly, in many cases, there is nothing in the corporate process of developing and introducing these new products or services to provide a timely market reality check for management. Today's corporate highway is strewn with attractive but unsuccessful products that never found their "natural market".

The following is a brief template providing questions, which may be helpful to you in beginning to formulate a reality check before your product development process has proceeded beyond the point of no return. It might be interesting for you and your marketing group to push your current or anticipated new product through this brief template.

Our challenge today is for you to answer the following simple questions as they relate to your new product or service:

1. What is the opportunity in the marketplace for our new product or service?

2. What are the vertical markets or market with the best opportunity? Why?

3. How can I quantify this opportunity?

4. What are the current market conditions and possible barriers to entry in this targeted market?

5. Who/What are existing alternatives to my proposed new product or service?

6. How do my product's features and benefits compare?

7. What are some identified needs that we can address with our product and service?

8. How will we demonstrate value to the potential user?

9. How will we provide customers in this target market the service and support they need or are used to? Have we calculated this into our product/service offering?

10. What are the economics of this market space? How will my product/service address these economics?

We could extend this template by adding another ten questions, but I think you get the idea. While it's important that your product or service offering has operational integrity and actually performs its promised function, it is mandatory early in the process that your focus should be directed to the marketplace. Most successful products we have observed over the years were introduced by a marketing team that took the time to understand the market environment and how that product or service would fulfill a need in that market space.

I'm sure your current marketing process addresses many of these questions in some way, but perhaps more emphasis would give your new product or service a much better chance of success.

All the best for success in 2005!

Regards,

Stephen J. Prinn
Managing Partner