Here's a marketing test. My birthday is coming up soon. How would you like to buy me a present. No idea what to get? What if I tell you I support the Crusaders, like mountain biking and drink red wine. Any ideas now?
How many times have you tried to buy a present for someone when you didn't know enough about them, their background, their interests, or what values were important to them. You end up buying another book voucher, when, with a little knowledge of your 'market', you could buy them something they really want.
Marketing your product is no different. If you don't know enough about your market, it is hard to satisfy your customers need.
Lychee nut drink anyone?
Great marketing is always rooted in knowing your market intimately. Dominant products in any market often rest on this advantage. The companies behind them have spent the time analysing and understanding the market, and uncovered information that puts them ahead.
Coca Cola is an example of focussing on market knowledge. While living in Atlanta, Georgia during 2002, I went to the Coke museum. One exhibit is "Tastes of the World", where you can savour a few of the 400 different drinks they market to 200 countries. Apricot, orange and cola mix, coffee, lychee nut and sour cherry are just some of the interesting flavours.
The Coca Cola company don't simply produce a beverage and then try and sell it. They spend an enormous amount of time and effort trying to understand what their customers want and then meet that need. This is not uncommon for the large consumer brand companies, but it is discipline that can be applied with equal success to smaller, business-to-business focussed manufacturers such as technology companies.
So how do you get to know your market, intimately?
Defining the nature and shape of the market is the first step to developing a good picture. The number of companies in the market, the shape of that market (e.g. is it dominated by a small group of large companies or characterised by many small firms), the overall value, what customers typically pay for your product type, how often they purchase it, where customers are located and so on.
The next piece of the knowledge puzzle is people. Who is involved in the buying decision (who influences, who signs the purchase order, who approves), how do they normally decide purchases, what criteria do they use for buying (e.g. cost benefit analysis, brand values), how much do they have to spend and when, what do they think of your product today, what outside advice do they look for when making buying decisions.
It is crucial to know how other companies might meet the need you have identified within your market. Who are these firms, what are their offerings, what market share do they have, what is their unique proposition, how are they perceived by customers.
Finally, knowing who you can work with to sell your product is equally important. Find out what other companies service your market, what they offer and how it might complement you, their market share and what sort of reputation they have.
Gathering the data
Today you can do most of this over the Internet, through industry media and other information sources. It doesn't have to cost much. Or even take much time. You just need to start looking for it, and be objective about the data you collect.
Objectivity is critical to getting to know your market well. Objectivity in both gathering data, and more importantly, in analysing and reporting it. Analysing and interpreting the data without bias is where technology entrepreneurs in particular can have trouble, because they have so much invested in their baby. As former IBM CEO Lou Gerstner says, "...in my experience not enough companies really do the analytical work in a truly objective way - hope usually prevails over reality."
It is also important to gain some qualitative data. Sending out four or five questions in an e-mail can be a good start. Even if you get a response back from 10 people it will give you a far better basis for making decisions than looking in the mirror. Getting feedback whenever and wherever you can from existing customers also adds to your store of market knowledge. Having the right conversations can be critical to gaining crucial insights into your markets.
It is those insights that can really power your marketing. The more you know about your market, the more obvious decisions can become. How do I price this, should I use the web as a channel, is this conference worthwhile - all decisions you might make now with your gut you could make with your head.
As Sun Tzu said way back in the fourth century, "Time spent in reconnaissance is seldom wasted."