I was asked a simple question the other day by a colleague who is just starting up a new business. He wanted to know how much time and effort he should expect to put into completing a market assessment. Simple question, right? My initial thought was to say something smart, like “how long is a piece of string?” But he was being sincere. And since this is a question I’m asked frequently, I thought I would share the main points we discussed.
The market assessment is the first (critical) step in an overall “go to market” strategy. Put simply, it answers the question “WHO am I selling to?” It’s easy (and tempting) to think that everyone will want to buy your latest gadget or gizmo. Therefore, why would you want to limit who you are targeting? In a word: “focus.”
A market assessment allows you to identify the most likely people to purchase your product, which enables you to focus your resources efficiently and productively. It is important to realize that “targeting” and “differentiation” is absolutely vital for any business to be successful.
You develop an assessment by analyzing the buyers’ consideration set, the competition, and the purchase drivers. A market assessment should include the following:
- Target market size
- Decision makers (by job function)
- Purchase drivers (how they select)
- Competitive analysis (packaging, pricing, and positioning)
- Pricing trends and market forecasts
Depending on your business, sector, and product or service, the way you gather this information varies. But without this information, you will not be able to effectively develop messaging, packaging, and other support for a roll out. It’s not enough to know who might buy your product, however. You also need to really understand how they will make the purchase decision and why they will select you over your competition. While going through this exercise, it’s helpful to put yourself in the mind of your target customer, and if you don’t know your target customer, well then, go talk to a few of them! The combination of these insights will form the basis for your positioning and marketing messages and answer the crucial question: “WHY CHOOSE MY PRODUCT”.
After talking over these points, my friend and I decided that his “piece of string” was shorter than we initially thought. He had already had spent a great deal of time talking to his target audience and gathering the information needed for a proper assessment. The next steps included organizing everything, uncovering the real nuggets, and developing actionable insights. He was on his way!
Unfortunately, I then tripped him up by asking him about the next stages in developing his “go to market” strategy: Now that you know WHO you are targeting, describe WHAT you are selling (product strategy), WHERE you intend to sell it (sales strategy), and HOW you are going to sell it (marketing strategy). My friend asked another simple question: “How long will it take to put this all together?” Once again, I thought about that piece of string. But I held my tongue and suggested another meeting to outline the next steps. And I will continue this tale of how a “go to market” initiative is developed in the next article. Read Part 2.