Market Knowledge & Product Positioning

Market Knowledge and Product Positioning

Strategic Market Research

• Tactical research involves immediate data collection through surveys, feedback loops, and trend analysis.
• Strategic research examines market forces at a macroeconomic level.
• This involves understanding shifts in consumer behavior, competitive landscapes, and potential disruptors over time.

Porter's 5 Forces

• Porter's Five Forces assesses:
• Threat of new entrants by determining market saturation and potential for innovative products
• Bargaining power of buyers by assessing price sensitivity of the target audience
• Bargaining power of suppliers by identifying key suppliers who control access to materials
• Threat of substitutes by considering available alternatives
• Industry rivalry by identifying intensity of competition and how to differentiate.
• Integrating strategic market research with real-time data improves the ability to forecast market trends.

Market Segmentation/Behavioral Targeting

• Market segmentation starts with understanding the market in layers.
• Demographics (age, income, gender) are the primary starting point.
• Psychographics (lifestyle, values, attitudes) and behavioral factors (purchase history, loyalty, decision-making triggers) provide deeper insights.
• Tesla segments beyond income by targeting early adopters of electric vehicles driven by innovation and environmental responsibility to craft targeted messaging.
• Customer data and CRM systems can be used to build profiles based on behavior
• This enables prediction of future actions, leading to higher conversion and retention rates.

Competitive Positioning

• Differentiation strategy involves being different in a way that resonates within a crowded marketplace.
• Value innovation involves finding untapped demand or creating new markets with fewer competitors.
• Cirque du Soleil transformed the circus industry by blending theatre, circus, and acrobatics.
• Positioning involves defining where the product should be in consumers' minds, such as high-end luxury or affordable but premium.

Positioning in the Market

• The Positioning Map framework helps identify where a product/service fits in terms of quality and price compared to competitors and identifies gaps for innovation.
• Constant competitor monitoring is needed
• This includes awareness of new market expansions, pricing model changes, or forming strategic partnerships, the competitive intelligence needs recalibration as needed.

Value Proposition Canvas

• Building a compelling value proposition involves:
• Identifying customer pains like frustrations, inefficiencies, or difficulties
• Identifying customer gains as aspirational desires or results they want from a solution
• Mapping products and services to address pains and provide gains in a compelling way
• A strong value proposition connects on a deep level by understanding both the practical and emotional needs of the target audience.
• Refining the value proposition is an ongoing process given customer feedback and market changes.

Turning Strategy into Action

• Turning ideas into scalable, profitable ventures is crucial.
• The Lean Startup Approach should be adopted
• Launch quickly with an MVP (Minimum Viable Product)
• Gather real-world feedback
• Iterate and pivot as needed.
• Airbnb started by renting out air mattresses, tested the market, iterated based on feedback, and scaled after finding product-market fit.