The Press, September 2005

In the 1970s there were only about five major brands of sports shoe. Today there are more than 285. Apart from making it hard for the average teenager to make a decision about their footwear, it is an indicator of the intense 'noise' that exists in most markets today. Whether you are selling to consumers or other businesses, marketing your product in this sort of environment is tough. The answer is increasing the intensity of your marketing by understanding that niches are not a dirty word.

Customers have more choice wherever they look. Since the 1970s styles of sport utility vehicles have increased from 8 to 38; over the counter pain relievers from 17 to 141; dental flosses from 12 to 64; and even TV screen sizes from 5 to 15 today. Against this background of wider options, there is a deluge of information and severe restraints on the average person's time. This adds up to incredible barriers to marketers trying to reach and convince people of the merits of their products.

Being heard in this environment is not about screaming louder than everyone else, it is about being smarter than your competitors. Marketing intensity comes from selecting a particular market and focusing your activity on it over the long-term. Not just achieving a few sales and moving on. The reality is that if you attempt to market to everyone you will end up marketing to no one.

The more that you focus on a particular market/customer, the higher the probability that they will focus on you and buy your product. Imagine you are go to a party with 100 guests. Over the night it would be hard to get to know everyone there, and for them to know and like you. But if you chose four or five people to get to know a much stronger relationship would be likely. The more you focus on a group of people the more likely they are to focus on you. Marketing is no different.

Kiwi's are not typically good at this. In our relatively small domestic market we strive to be generalists to survive. We tend to be 'jack of all trades', never really developing in-depth knowledge or capability in a particular market. Taking this approach in offshore markets will make achieving export success exponentially harder. Even at home finding a niche and trying to dominate is a sound approach.

A local example is in real estate. This is very competitive marketplace, with many brands and many agents - there are 142 real estate agency offices in Christchurch. The key to success is not necessarily trying to get as many listings as possible.

I have observed a local agent called Simon Barrett who has carved out a niche in coastal property, particularly along the stretch from South Shore to North Shore. He bills himself as "Coastal Real Estate Specialist", puts out a newsletter focussing on coastal real estate and only sells in that area. By focussing on this discreet group of customers he has obviously built a lot of knowledge of the dynamics of the local market, what works and what doesn't. Because he is only operating in this area, to the locals he appears to dominate - with more properties listed than other single agency. If you want to sell your house in this area Mr Barrett is now probably the number one choice. If his focus was city-wide he would just be another agent amongst the hundreds.

But how could he grow to a reasonable size? Now Mr Barrett has secured a dominant position in this market, he could move on to another coastal area such as Sumner or Spencerville/Brooklands using his number one status along Brighton's coast. It is a much more powerful strategy than simply trying to grab as many listings as you can.

Using a similar sort of strategy also helps when you look offshore. By finding, focussing on and dominating a niche, no matter how small, you are much more likely to get sustainable growth. Trying to sell your one product into six markets is the equivalent of selling six different products! Each market has different people, needs, sales cycle, advertising needs, support processes, product features, etc. This demands a specific approach for each market. Funding six 'different' products from a New Zealand dollar cashflow is a big challenge.

So how do you go about selecting a market niche?

  • Establish the need - find the best match between your product and a group of customer's with an unmet need.
  • Market attractiveness - establish how attractive that market is - it's size, where it is located, how competitive it is, what barriers to entry exist and so on.
  • Your capability - balance the attractiveness of a market against your organisation's capability, what sort of skills you have, where you and your sales channels are located, what reference sites you have in this market, what resources are required to met the market need.

In an increasingly competitive world, the answer is not to shout louder but to be smarter. Smart marketing is built around a great understanding of a discreet group of customers and focussing all of your efforts on them. Once you have prospered in that niche you can move on to the next. Achieving that concentration is crucial, because the more you market to everyone, the more you are marketing to no one.

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