Market capture
Market entry strategies
What is your company’s goal? Are you ready to create new products and generate demand for them? Or will you follow others by creating clone products? These are fundamentally different strategic positions, and it is necessary to determine your own at the very beginning of the journey, because the choice of road depends on where you want to come.
Market Leader Strategy
The strategy of the market leader or, as it is commonly called in marketing, the strategy of the innovator involves the creation of new products and the formation of demand from scratch. The strategy of an innovator allows you to take a leading position in the market and get a large share, but not every company is able to follow the path of an innovator.
For the successful implementation of the innovator’s strategy, the company should pay special attention to the following factors:
Market geography
Assortment width
Mass advertising
Product Quality
Follower Strategy
Many companies do not seek to develop new products, their strategy is to follow the innovator and create products similar to those that are already in demand. In this case, the main goal of the manufacturing company is to capture as much market share as possible and shift the innovator company from a leading position.
As a rule, a follower company is more conservative and is not ready for risk. She prefers to follow the leader, taking into account all the shortcomings of the product and marketing in order to minimize costs when promoting a clone product to the market.
Companies using the follower strategy rarely become market leaders, but those who succeed have distinctive features:
? the marketing budget of successful followers should exceed the budget of innovators;
? the follower product takes into account all the shortcomings of the innovator company’s product and offers higher quality;
? follower production is ready for rapid capacity expansion without loss of product quality.
Market capture strategy
Case: how to sell a product that no one is looking for?
The market capture strategy can be used not only by creating clone products, but also by building the correct positioning of substitute products. Until some time ago, the amphibian aerosani were not in demand on the Internet. The number of requests for the keyword “aerosani amphibia” was 601 impressions per month. At the same time, the number of impressions for keywords related to substitute products exceeded 1 million. Swamp walkers, snowmobiles, all-terrain vehicles and similar vehicles were searched much more often. Using the strategy of capturing market share, the company managed to generate demand for its products.
During the analysis and selection of the semantic core , it was possible to expand the potential demand and predict the level of its growth due to the following groups of requests:
? substitute products
? synonyms of brand and products
? competitors’ products
? products that perform similar functions
? brands and models of competitors
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? requests mentioning the company’s brand
In the future, a lot of work was done on the company’s website, which allowed not only to study the aerosani in detail, but also to compare them with competitors’ goods and substitute goods.
As a result of the work on capturing market share and reorienting customers to a new type of product, the number of applications has increased 18 times!
Product life cycle
It’s no secret that every product has a life cycle. In today’s era of rapidly changing trends, the life cycle of almost any product is getting shorter every year. And if this situation existed only in technological markets, such as mobile phones, applications, etc., a few years ago, today the shortening of the life cycle of products is observed in almost all, including “traditional industries”, starting with consumer markets for food, clothing and cosmetics, ending with automotive and industrial production.
What can this market situation mean for an entrepreneur? On the one hand, this is a window of opportunity for bringing new products to the “blood-stained markets”, with a new approach, thanks to which it is possible to significantly crowd the “old guard”. One of such examples of “shooting” in traditional markets are the examples of “Tinkoff investments” in the “scarlet market” of brokerage services, “Vkusville” in the even more mature market of grocery retail. On the other hand, for an entrepreneur, the current situation is the need to exist in conditions of constant danger of losing the market for already “working products”. Thus, in these conditions, it is necessary to constantly develop new product strategies, otherwise a situation may come for the company when the life cycle of one product has come to an end, and the new product has not yet gained a position, which entails imminent death for the company.
To understand the reasons for the success / failure of launching new products on the market, it is possible to refer to statistics.
What does “loss marketing” give and how can it be applied in capturing the target market?
It gives the creation of value for the consumer, in which he chooses only you. Increases conversion to leads purchase. Encourages recommendations. Distinguishes it from competitors. Minimizes advertising costs.Like in a fairy tale, is it true?
Well, that’s the way it is, but to create such a fairy tale, you need to have iron balls and a little creative thinking :-)
Examples in the studio:
Let’s start with the classics and continue with the Russian realities.
Pizza Domino’s — turned from a small restaurant in Ypsilanti (Michigan) into a chain worth $ 10 billion. How did they do it? They understood the problem. We made a reinforced concrete offer for a solution. They did it, no matter what (having calculated marketing by losses).
The problem that existed in the USA at the end of the last century: you came home, you want to eat. Cooking and going to the store is lazy and time is a pity. Or you sit at work late, your stomach rumbles, you want hot.
And Domino’s Pizza made an offer: In 30 minutes, they will deliver a hot pizza or you will get it for free.
Damn, and you’re just terribly hungry! And if they are late? You get a pizza as a gift. That is, you don’t pay anything at all. Half of all buyers prayed that the courier would be late! And it was like… cool! New! Interesting!
Loss Marketing Formula
1. Find the audience and the problem that your product can solve.
Everything always starts with a clear audience and its problems. When people were waiting for pizza, they wanted to eat and did not want to cook. When they needed landing pages, they wanted this page to sell when ads hit. When people bought a SIM card, they wanted to pay little. Everything is simple.
No need to invent a bicycle and embark on the “blue oceans”. An infinite number of markets, seemingly overheated markets, are ready to open up to daring marketers who will go this way.
2. Make a reinforced concrete offer.
As often, there is absolutely nothing behind the advertising of a business. “We sell furniture” — so what? A lot of people sell furniture. “We repair laptops, we have 200 service centers and more than 5,000 specialists” — and what’s next? Why should I buy? Or: “we are an online watch store, we have 3000 models at the lowest prices” — I even wanted to yawn. There is no offer here, there is a list of features.
A real offer that will break the market should be clear, specific, without any footnotes and small fonts at the end of the page.
At the same time, your math should converge. In the studio, we spent a long time turning different options and testing before creating just such an offer. We did not guarantee sales — but we could guarantee conversion, because we were fully responsible for this site.
3. Do the math.
Best of all, “loss marketing” works in industries with good margins. But you can also work with a minimum margin, you just need to turn on your imagination. Example: fix-Price — all for 50 rubles. In these stores, there are products more expensive than 50 rubles at cost, there are much cheaper. But when you walk through these endless rows, it seems that there are so many cool things and so cheap. The expectation is that you will buy a lot of stuff and the company will eventually earn! If you have a large assortment, think about this model.
4. Create a beautiful and concise slogan.
Customers with payment upon order — Hooglink (Our small CPA network).
Delivery of any order in one night, to any part of the globe — FedEx.
Simple, clear, in one line. The fewer letters, the better. And once again: no footnotes in the margins and asterisks.
5. Remove everything superfluous from your business model.
My most favorite item. He is very, very important. The math will begin to converge when you remove all the unnecessary things that the client, in fact, does not need. In the example with pizza, it’s not strange, but taste was not as important to people as the speed of food delivery and the possibility of free overeating. It’s amazing in fact, but according to all surveys, Domino’s pizza was always to taste at the end of the ratings.
Using the example with landing pages, we removed everything except the conversion guarantee. Just think, we have removed the holy of holies: coordinating the design with the client, adding features and gray-brown-crimson colors from the customer. It gave us just + 1000 points to the business. There are no big costs for a designer and a proger. All are employees of the same type, the transaction moves faster, etc.
And yes, I had to refuse customers in batches (which, by the way, is very nice), while the sellers had real confidence in the product. Remove everything that does not solve the main problem of the client, minimize your costs and spit on competitors and what they do. Let them spray while you grow. You have to be uncompromising while others are creeping under customers.
It’s like Cirque du Soleil (the most famous in the world) refused to perform with animals (it was expensive to keep them) and focused on clowns and acrobats. Moreover, this part of them is brought to perfection. By removing the excess that does not contribute to the implementation of the offer and solving the problem, you will start earning a lot.
6. Always fulfill the offer.
Iron balls are needed here. Really. Most entrepreneurs, when they start counting, start to give up, they are not sure about the calculations, that it will work, etc. It is best to conduct tests on something small, make an offer for a new company, launch advertising, look at the response. If this is possible in your niche, then go ahead.