The simultaneous pursuit of Differentiation or Low Cost
Market Information training 8.3.2011 at Innopoli, Espoo Juhani Polkko | San Francisco Oy
Objectives Define market and industry Understand positioning and differentiation 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
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
Participant introductions (1 min) 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?
Define market and industry What market should we be in? How does it fit different industries?
Market segments ? Competitors ? Barriers ? ? Customers ? Partners ? Industry sectors Prospects The ultimate solution for a well-defined, painful problem Best entertainment in the market, following the latest consumer trends Team Business Model Technology Finance
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
Industry boundaries Our market What industry you believe you are in? What industry you should be in?
Understand positioning and differentiation What’s our place in the value chain? How do we differentiate from competitors?
Making competition irrelevant Source: Adapted from Blue Ocean Strategy, page 18
Value Innovation Lower Costs Value Innovation! Higher Value Source: Blue Ocean Strategy, page 16
The Four Actions Framework Eliminate factors that are no longer relevant. Reduce features and simplify offering Create factors the competition does not offer Raise the demand by discovering the value sources Source: Blue Ocean Strategy, page 29
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.
Learn about methods for market validation Process to learn about market demand and customer aspirations
1. Create the positioning pitch Source: Embrase Business Consulting
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 organization Source: Infrasystems (adapted)
3. Test assumptions/hypotheses Market/customer problem Positioning Value proposition Differentiation Target market segment Core product features Distribution Pricing
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)
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?
See 10 free tools for market intelligence I can’t afford to buy research reports – what can I do myself?
Tool #1: Google Advanced Results filtering http://www.google.com/search?hl=en&q=spinno&aq=f&aqi=p-p2g8&aql=&oq=
Tool #2: Google Reader & RSS RSS subscriptions http://www.google.com/reader/
Tool #3: Google Alerts Automatic keyword alerts by email or RSS http://www.google.com/alerts
Tool #4: Efficient email Email filtering and data mining https://mail.google.com/
Tool #5: Google Trends Keyword comparison and trends http://www.google.com/trends
Tool #6: Ad Preview Tool Find AdWords ads in other countries https://adwords.google.com/select/AdTargetingPreviewTool
Tool #7: Keyword Spy Find out which keyword competitors use http://www.keywordspy.com
Tool #8: Vertical search Not everything can be found with Google Example (SEC): http://www.sec.gov/edgar/searchedgar/companysearch.html Others listed at www.spinno.fi (companies, trademarks, patents, etc)
Tool #9: ChangeDetection.com Get alerts for any website changes http://www.changedetection.com
Tool #10: Google Apps (bonus) Free email and collaboration suite http://www.google.com/apps/intl/en/group/index.html
Create market monitoring plan & process How do we do continuous market intelligence efficiently?
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.
Simple implementation plan (1/2) Decide on the resources and tools Preferably only founders should follow the market Select keywords Influencers, competitors, prospects, industry terms Select followed channels RSS feeds, newsletters, websites Setup tools and stick with it Make a decision how often you change them
Simple implementation plan (2/2) 5. Create a schedule for monitoring (max. once/day) Preferably outside office hours Save new resources but add them to the used tools for example once a week If you have open marketing strategy, actively engage in online discussions or appoint a person to do so Analyze and discuss findings once a month and decide on action plans for marketing/sales/develop.
REMEMBER! The amount of information is unlimited. 98% of information cannot be found online. Most valuable source is your personal network.
DISCUSS about challenges and solutions What challenges have others faced and how to overcome them?
Top lessons learned Find the customer pain. Simplify your pitch. Reiterate fast enough. Prepare for long sales cycles. Focus on yourself, not others.
Contact info San Francisco Oy Fredrikinkatu 61, 6th Floor FI-00100 Helsinki Juhani Polkko, CEO +358 40 543 0825 / Skype: jpolkko firstname.lastname@example.org www.twitter.com/juhani www.linkedin.com/in/juhani