- Identify market opportunities.
- Segment the market and select the right segment.
- Devise a competitive strategy.
The whole idea is to meet market requirements better than the competitors can.
1. Explore the Market
Ask which are the areas where the company has distinctive advantage over the competition. Study the sales potential of the new market and its growth rate. Do financial calculations like to produce, profits, pricing etc. Understand market dynamics and channels of distribution.
Put the key factors that may contribute to success on paper.
2. Segmentation and Targeting
Markets can be segmented on different bases, e.g., users, products. Further segmentation be on the basis of end-use. The marketer targets his product to a particular segment.
While doing so, competitor’s positions are kept in mind, by drawing a product space map (PSM).
3. Competitive Strategy
Identify the competitor’s weaknesses and your company’s strengths. Emphasize your strengths to differentiate your offer. The company identifies the most important differences to develop strategy.
Consider factors like:
- Market share
- Product range
- Corporate profile
- Financial strength
- Cost position
- Product differentiation
- Quality of management, technology, distribution
Find out the gaps between you and your competitors against the above-listed factors.
It will give you an offer that distinguishes you – a benefit bundle or value package consisting of price, distribution and service mix.
These days many products are technologically so similar to each other and distinctions are not possible. The other possibilities to distinguish the offer are so many – warranties, after-sales-service, installment offers, price-offs, discounts, strong distribution, responsiveness etc.