Marketing From the Inside Out: Analyzing Your Market
Part two in a three-part series: how to determine what your market wants and give it to them
This is the second of a three-part series on "Marketing From the Inside Out." In part one, I offered four guidelines for marketing: express your passion, honor your values, use common sense, and find a need and fill it. In this article, I will explore market analysis.
One of my marketing maxims over the years has been "Know your audience (before you open your mouth)." People will hear your message a lot better if you are speaking their language. You don't communicate with your doctor like you would with a toddler, and you don't assume a Russian speaks Japanese. Communications that rely solely on cleverness, chest-thumping superlatives or jargon are often missing the target.
Step 1: Conduct Customer Analysis
Most businesspeople have heard of the concept of communicating benefits, not just features. To identify benefits, you must first understand your customers, their motivations and needs, and how well they are being served.
I've met many people in my career who identify their market as everyone or anyone. Well, it's pretty difficult, not to mention expensive, to let everyone know about your product or service. So you need to find the people most likely to buy your product. Answer the following questions (use your gut if you don't have hard data):
- Why would someone want your product or service? What need does it fill? List the benefits and the problems it solves. In what way does it improve the life of the user?
- Would you personally buy this product? Why or why not? The "why nots" may give you an insight into potential weaknesses.
- Who, in your opinion, is most likely to buy it? Be as specific as you can. How old are they? Male or female? Where do they live? Where do they work? These people are your primary target market. It doesn't mean that you don't have second- or third-tier markets.
- How does your primary target market currently go about buying existing products or services of this type? What are their sources of information? Word-of-mouth? Trade publications? Yellow pages? The Internet?
Step 2: Survey the Competition & Other Hurdles
So you have a pretty good idea of whom you will go after first. This is your market segment. And you're not alone. As you look around, there are lots of other companies vying for your customer's attention. Your goal is to create value, a reflection of worth rather than cost. This is where you have to differentiate yourself. If there is no difference between you and the next guy, it all comes down to price.
It is also important to understand what the competition is. The competition is the method by which your prospective customer is meeting his needs now. To a landscape service, the competition might be a lawn-mower manufacturer whose new self-propelled Mower 9000 makes it look so easy to do it yourself. To a company selling tax software, the competitive landscape includes other software products as well as CPAs, storefront tax services and the prospect's brother-in-law.
The following questions can help you get a clearer picture of where you fit in:
- Who and what is the competition? Include every way a person currently solves the problem your product or service addresses.
- Is there room for another competitor in your primary market segment? If the answer is no, you might look to see if there is another segment where you could add value. If the answer is yes, go to the next question.
- Why would a customer come to you vs. one of your competitors? This is defining your value proposition. They might come to you for a number of reasons: convenience, price, reputation, quality, expertise, recommendations, etc.
In addition to the competition, it is useful to understand the bigger industry you are playing in as well as the environmental and regulatory climate.
Step 3: Know Yourself
Now that you've chosen your target market and understand the competitive landscape, how do you fit in? The easiest way to find out is to take a snapshot-a SWOT analysis (strengths, weaknesses, opportunities and threats). Included in this should be:
- A cost analysis-what does it cost you to deliver the product and service?
- What are the financial resources and constraints of the company?
- What are your distinctive assets and liabilities?
- What strategic questions do you have?
In part one of this series, I talked about honoring your core values, and the relative ease of expressing your passion when you operate from those values. The same is true for your company. What does the company stand for? Clearly it is there to make money, but money is the byproduct of a well-run organization. A company that understands and operates from its ethical core will also produce a sustainable business with satisfied customers, fulfilled employees, industry respect and the potential to do great things.
External Analysis & Internal Imperatives
It is easy to look around today and see examples of companies that either didn't have an ethical core, or moved away from it. How else could one explain how company executives could lock down their employees' stock investments while remaining free to sell stock themselves? That kind of behavior is evocative of the galley slaves in Ben Hur that were shackled to the oars as the ship was sinking.
Executives only responding to the external demands of Wall Street might see a short-term financial uptick, but they'll ultimately pay the price by compromising the company's long-term sustainability. To build a healthy business (as contrasted with the smash-and-grab mentality of many of the dotcoms), core values must be part of the business culture and woven into the business plan. Ask yourself: What are my values, and how am I honoring them in the way I do business?
The final article in this series will examine how to build a values-based marketing plan.
Rebecca Cooper is a professional and personal coach who works with visionary people seeking to create and live authentic lives. She helps provide clarity, illuminate choices and reflect the passion of her clients. To explore what's next in your life, e-mail her at Rebecca@authentes.comor visit her Web site at www.authentes.com.