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  1. 1. Market Information training11.10.2011 at Innopoli, EspooJuhani Polkko | San Francisco Oy
  2. 2. Objectives• Define market and industry• Understand positioning• Know about basics of Blue Ocean Strategy• Learn about methods for market validation• See 10 free tools for market intelligence• Create market monitoring plan & process• Discuss about challenges and solutions
  3. 3. Instructor background• 8 years in consumer electronics/games• 2004-2006 in Silicon Valley• 2006-2007 U.S. startup• 2008-2009 Nokia Interactive• 2009-2011 Offerium• 2009- Freespee AB• MBA (intl. finance) Aalto/HSE EE
  4. 4. Participant introductions (1 min / each)• What does your company do?• In what industry you operate in?• Who are your customers at the moment?• Are they in Finland or international?• Do you have a product/service in the market?• What kind of market research have you done?
  5. 5. What market should we be in? How does it fit different industries?DEFINE MARKET AND INDUSTRY
  6. 6. Competitors ? ? Barriers ? Customers ? Partners Market segments ? Prospects ? Industry sectorsBest entertainment The ultimate in the market, solution for a well-following the latest defined, painful consumer trends problem Team Finance Technology Business Model
  7. 7. Market or Marketplace• Market = potential customers (prospects)• Whose problems does your innovation solve?• Segment your market into different types of customers (by common characteristics) – Makes sales and marketing easier – e.g. in B2B: company size, industry sector, maturity – e.g. in B2C: consumer behavior, demographics• Define in which industries your market belong to
  8. 8. Industry boundaries Our market Telecom What industry you Marketing Media believe you are in? What industry you should be in?
  9. 9. Where are we in the value chain? How about our customers, partners, competitors?UNDERSTAND POSITIONING
  10. 10. STP model • Group the potential customers by commonSegmenting characteristics • Behavior, position in the value chain, etc. • Select the most potential segments (next slide) Targeting • Focus on one segment only, or limited number of segments, depending on resources • Position the offering to become a winner in a Positioning market segment (“red ocean”) • Define a new market space (“blue ocean”)
  11. 11. Value chain example Content Content UserContent creation End user packaging distribution interface User Value Money• Should I focus on one part or several (vertical integration)?• Where are my competitors? Should I be in the same place?• Who is the driver in the value chain (demand creator)?• Select Push or Pull sales strategy?
  12. 12. How prioritize market segmentsPriority How strong is … Weight1 Customer’s compelling reason (pain) to buy 30%2 Customer’s knowledge 20%3 Potential for market dominance 15%4 Potential for follow-on markets 10%5 Product/service maturity 10%6 Need for intermediaries 5%7 Pricing 5%8 Credibility 5%Source: Chasm Institute / Embrase
  13. 13. Positioning = Perceived Value
  14. 14. How to make competition irrelevant?KNOW ABOUT BASICS OF BLUE OCEAN STRATEGY
  15. 15. Making competition irrelevant Red Ocean Strategy Blue Ocean Strategy Market Space Compete in existing market Create uncontested market space. space Competition Beat the competition. Make the competition irrelevant Demand Exploit existing demand. Create and capture new demand. Price vs. value Make the value-cost trade- Break the value-cost trade-off. off. Overall strategy Alight the whole system of a Alight the whole system of firm’s activities with its firm’s activities in pursuit of strategic choice of differentiation and low cost. differentiation or low cost.Source: Adapted from Blue Ocean Strategy, page 18
  16. 16. Value Innovation Lower Costs Value Innovation! Higher ValueSource: Blue Ocean Strategy, page 16
  17. 17. The Four Actions Framework Eliminate factors that are Reduce no longer relevant. Reduce features and simplify offering New Eliminate Value Create Create factors the Curve competition does not offer Raise the demand by discovering the value Raise sourcesSource: Blue Ocean Strategy, page 29
  18. 18. Examples of Blue Ocean strategies
  19. 19. Why most still choose Red Ocean• Red Ocean is proven market.• Marketing/sales can be hard in Blue Ocean.• Blue Ocean often requires more capital.• Differentiation is usually relatively simple.• Red Ocean strategy is easier to plan and predict.• Competition is never perfect.• No strategy is black or white.
  20. 20. Process to learn about market demand and customer aspirationsLEARN ABOUT METHODS FOR MARKET VALIDATION
  21. 21. Typical market research methods• Competitor tracking and analysis• Trend analysis• Technology surveying• Conferences & trade shows• Market reports• Co-operation with business partners• Co-operation with research institutes• Through media• Conducing market studies
  22. 22. 1. Create the positioning pitchCompany A is a <what do we do, what do we offer, what problem are we solving and how>To <what is our primary target market segment>Who <what do our customers need and why>Compared to <how to we differentiate – what makes us unique>othersOur background is <who are we, where do we come from, how do we establish credibility>Source: Embrase Business Consulting
  23. 23. 2. Find the pain• Find 3-5 decision makers within your target segment• Agree on short interviews (ask for opinion, do not sell)• Interviews should be done by company founders – If possible; Only exception is language issues• Make sure the person understands product/market• Most important questions – “What keeps you up at night?” – Test your positioning pitch – Plans for investing in the space (short or long term) – Operational contacts within the organizationSource: Infrasystems (adapted)
  24. 24. 3. Test assumptions/hypotheses• Market/customer problem• Positioning• Value proposition• Differentiation• Target market segment• Core product features• Distribution• Pricing
  25. 25. 4. Analyze the results• Were the questions open-ended enough to create a dialog?• Is this the right target market segment?• Did we ask the right questions?• Were the answers aligned?• How did the answers compare to our assumptions?• Do we need to make changes to our product strategy?Continue until confident you are on right track.If results are negative, try adjusting the pitch or change segment.Source: Infrasystems (adapted)
  26. 26. Discussion points• What about consumer products/services?• When should I buy external research services?• How to deal with foreign markets?• Should I sell first or develop first?• Who should talk to the customers/prospects?• How much is enough validation?
  27. 27. I can’t afford to buy research reports – what can I do myself?SEE 10 FREE TOOLS FOR MARKET INTELLIGENCE
  28. 28. Tool #1: Google Advanced• Results filtering•
  29. 29. Tool #2: Google Reader & RSS• RSS subscriptions•
  30. 30. Tool #3: Google Alerts• Automatic keyword alerts by email or RSS•
  31. 31. Tool #4: Efficient email• Email filtering and data mining•
  32. 32. Tool #5: Google Trends• Keyword comparison and trends•
  33. 33. Tool #6: Ad Preview Tool• Find AdWords ads in other countries•
  34. 34. Tool #7: Keyword Spy• Find out which keyword competitors use•
  35. 35. Tool #8: Vertical search• Not everything can be found with Google• Example (SEC):• Others listed at (companies, trademarks, patents, etc)
  36. 36. Tool #9:• Get alerts for any website changes•
  37. 37. Tool #10: Google Apps (bonus)• Free email and collaboration suite•
  38. 38. How do we do continuous market intelligence efficiently?CREATE MARKET MONITORING PLAN & PROCESS
  39. 39. Pitfalls and warnings• Monitoring can easily steal a lot of time• Set up rules how much employees can use work time• More important to decide what not to follow• Always decide what you want to get from the process• Usually the only good reason for market intelligence is to create foresight and make shift changes• Don’t worry too much about the competitors.
  40. 40. Simple implementation plan (1/2)1. Decide on the resources and tools – Preferably only founders should follow the market2. Select keywords – Influencers, competitors, prospects, industry terms3. Select followed channels – RSS feeds, newsletters, websites4. Setup tools and stick with it – Make a decision how often you change them
  41. 41. Simple implementation plan (2/2)5. Create a schedule for monitoring (max. once/day) – Preferably outside office hours6. Save new resources but add them to the used tools for example once a week7. If you have open marketing strategy, actively engage in online discussions or appoint a person to do so8. Analyze and discuss findings once a month and decide on action plans for marketing/sales/develop.
  42. 42. REMEMBER!• The amount of information is unlimited.• 98% of information cannot be found online.• Most valuable source is your personal network.
  43. 43. What challenges have others faced and how to overcome them?DISCUSS ABOUT CHALLENGES AND SOLUTIONS
  44. 44. Case: Freespee
  45. 45. Top lessons learned1) Find the customer pain.2) Simplify your pitch.3) Reiterate fast enough.4) Prepare for long sales cycles.5) Focus on yourself, not others.
  46. 46. Contact infoSan Francisco OyFredrikinkatu 61, 6th FloorFI-00100 HelsinkiJuhani Polkko, Managing Partner+358 40 543 0825 / Skype: