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Will You Add? - Do You REALLY Want to Enter That New Market?
If you've ever driven through Iowa, the tall corn field avenues can make you feel so dizzy you might think you're falling off the edge of the Earth.DeWitt, Iowa, a town of about 4,500 people, is one of these cornfield towns and was home to JoAnna Lund, the "cookbook lady" who in the second half of her life sold over 3 million cookbooks; she appeared on CNN, Home Shopping Club and even wrote a cookbook published by a major publisher.Lund was a farmer's wife, and she knew how to spread a fine table whenever neighbors gathered to help with a big farming project. But following a divorce, she gained 60 pounds and soon became depressed.When her son left home to become a soldier, the Iowan realized she wanted her health back and began creating healthy recipes for herself. She wanted to cook healthy food that looked, tasted, smelled and felt like what she had always eate
* If there are a relatively few number of viable competitors participating within the targeted market, it may more than
justify your market entry
* Sometimes it is less expensive to acquire an existing, resource limited, market participant than try to take market share with a new approach
11) Ability to maintain a technical advantage:
* Can you protect your technology within the time frame required to cover your new market entry investment?
* Maintaining technical advantages requires quality, technical talent. If your current technical staff is over burdened or limited you will not compete
12) Fit with existing company resources:
* Can your company absorb the financial, emotional and physical changes required to effectively compete in the new market?
* New markets often require new, certainly more, talent and personnel
13) Fit with established customer perceptions:
* How will your existing customers be affected by your pursuit of a new market and new customer base?
* It is critical to define and evaluate your existing customer’s perceptions of all your major stra
There is a marked difference between the quick-service companies that are celebrating an anniversary this year and the foodservice products that are doing the same. To wit, little has changed about the Tater Tot since it first appeared in grocery stores 50 years ago. Quite a bit has changed at Burger King during that same time span. Buffalo wings might have undergone a few evolutions since 1964—new flavors, boneless chicken, fried versus baked—but those modifications are nothing compared to what's happened at Arby's over the last 40 years. Beloved sauces, dishes, and sides can—and often should—retain their original identity; companies do not have that same option.Had many of today's great companies not embraced change and adhered to old attitudes about the marketplace, they wouldn't be where they are today. A culture of constant learning and development has allowed many compan
Sometimes it is obvious that entering a new market is a “no brainer” or it is perceived as the “right thing to do” because a competitor has taken the plunge or a handful of existing product or service users, within that market segment, are asking for your market participation.
Taking on a new market is an integrative decision process, cutting across a broad number of competitive issues, internal company functions and various targeted organizational entities. A decision of this magnitude should not be taken lightly because of the overall affect it can have on the total direction of your company and prudent use of limited resources. The cost of making a wrong decision here can be significant both in actual capital outlays and the opportunity costs realized of NOT pursuing another, “better” market alternative.
In Al Ries and Jack Trout’s, “The 22 Immutable Laws of Marketing”, being FIRST in a new market is everything, first is best! Sometimes deciding to venture into a new market segment just because a competitor did only makes the same decision one of duplicate failure.
Anyone who has ever been involved in sales management knows that sales personnel have a tendency to sell what they don’t have … always trying to solve all of every customer’s problems no matter whether it makes financial sense for the company they represent or not. Marketing managers also have to learn to systematically justify entering a new market not because a handful of existing market participants have asked them to enter their market.
The first step in evaluating the overall merit of entering a new market should be to discuss and determine the applicability of these 14 market segment attributes:
14 Critical Market Segment Attributes
1) The number of products/ services required to effectively compete:
* Ideally the more “full service” you can be the better your chances of success
* Customers prefer “one-stop shopping”, if you cannot provide the complete customer solution package, they have little reason to switch suppliers
2) Capital required to effectively compete:
* Understand your costs to enter a new market before you assume your revenues
* Sales projections are typically too high and cost estimates too low in new business ventures
3) Long term sales potential:
* Accelerating advances in technology reduces long term customer retention possibilities. In many markets customer needs are constantly changing.
* Priority should always be give to retention of existing, short term revenue streams, ultimately the best means to fund potential long term growth
4) Relative Profitability:
* Is return on investment greater via a new product or pursuing another market?
* It is always less costly to grow profits from existing customers in existing markets than to pursue new customers in new markets
5) Ease of product distribution:
* New markets are often best penetrated with non traditional distribution/ sales representation
* Does this potential market “fit” with your current distribution structures?
6) Post sale service requirements:
* Product/ service information demands of new market customers can require more and new forms of post sale customer service
* Technical support for state-of-the-art product/ service offerings can be in limited supply and very costly, difficult to staff
7) Degree of customer loyalty:
* Every market has a varying degree of customer loyalty depending on number and quality of competitive product/ service offerings
* Do key targeted users within the new market buy on product/ service value or well established relationships with existing suppliers?
8) Time required to get into the market:
* Product/ service “life cycles” in some industries last only a couple of months
* Can your company develop, test, certify and fill distribution channels of a short life cycle product/ service within the time frame required?
9) Anticipated competitive response:
* New market entrants are greeted with new competitive marketing tactics upon entry by established suppliers who seek retention of existing market share
* Will existing pricing levels remain once you have entered the market?
* How will market pricing degradation eventually affect your margins and ROI?
10) Number of viable competitors:
* If there are a relatively few number of viable competitors participating within the targeted market, it may more than
justify your market entry
* Sometimes it is less expensive to acquire an existing, resource limited, market participant than try to take market share with a new approach
11) Ability to maintain a technical advantage:
* Can you protect your technology within the time frame required to cover your new market entry investment?
* Maintaining technical advantages requires quality, technical talent. If your current technical staff is over burdened or limited you will not compete
12) Fit with existing company resources:
* Can your company absorb the financial, emotional and physical changes required to effectively compete in the new market?
* New markets often require new, certainly more, talent and personnel
13) Fit with established customer perceptions:
* How will your existing customers be affected by your pursuit of a new market and new customer base?
* It is critical to define and evaluate your existing customer’s perceptions of all your major strat
Despite what some people might say management is more than leadership. It is possible to be a great manager and yet still be a bad leader and vice versa. I will explain this further later in this article but let us start with some definitions.A manager is someone who is responsible and accountable for results through making decisions and organising resources (human and non-human). Management is the theories that inform what a manager does and the practices that managers undertake.A leader, on the other hand, is defined by having a following. Through personal qualities, she or he elicits a group of followers to move in a specific direction or execute a set of commands given by the leader. Leadership is the quality that a leader is said to possess.My first observation is that not all management is about leadership. The person managing a technical (as oppose to a so
Anyone who has ever been involved in sales management knows that sales personnel have a tendency to sell what they don’t have … always trying to solve all of every customer’s problems no matter whether it makes financial sense for the company they represent or not. Marketing managers also have to learn to systematically justify entering a new market not because a handful of existing market participants have asked them to enter their market.
The first step in evaluating the overall merit of entering a new market should be to discuss and determine the applicability of these 14 market segment attributes:
14 Critical Market Segment Attributes
1) The number of products/ services required to effectively compete:
* Ideally the more “full service” you can be the better your chances of success
* Customers prefer “one-stop shopping”, if you cannot provide the complete customer solution package, they have little reason to switch suppliers
2) Capital required to effectively compete:
* Understand your costs to enter a new market before you assume your revenues
* Sales projections are typically too high and cost estimates too low in new business ventures
3) Long term sales potential:
* Accelerating advances in technology reduces long term customer retention possibilities. In many markets customer needs are constantly changing.
* Priority should always be give to retention of existing, short term revenue streams, ultimately the best means to fund potential long term growth
4) Relative Profitability:
* Is return on investment greater via a new product or pursuing another market?
* It is always less costly to grow profits from existing customers in existing markets than to pursue new customers in new markets
5) Ease of product distribution:
* New markets are often best penetrated with non traditional distribution/ sales representation
* Does this potential market “fit” with your current distribution structures?
6) Post sale service requirements:
* Product/ service information demands of new market customers can require more and new forms of post sale customer service
* Technical support for state-of-the-art product/ service offerings can be in limited supply and very costly, difficult to staff
7) Degree of customer loyalty:
* Every market has a varying degree of customer loyalty depending on number and quality of competitive product/ service offerings
* Do key targeted users within the new market buy on product/ service value or well established relationships with existing suppliers?
8) Time required to get into the market:
* Product/ service “life cycles” in some industries last only a couple of months
* Can your company develop, test, certify and fill distribution channels of a short life cycle product/ service within the time frame required?
9) Anticipated competitive response:
* New market entrants are greeted with new competitive marketing tactics upon entry by established suppliers who seek retention of existing market share
* Will existing pricing levels remain once you have entered the market?
* How will market pricing degradation eventually affect your margins and ROI?
10) Number of viable competitors:
* If there are a relatively few number of viable competitors participating within the targeted market, it may more than
justify your market entry
* Sometimes it is less expensive to acquire an existing, resource limited, market participant than try to take market share with a new approach
11) Ability to maintain a technical advantage:
* Can you protect your technology within the time frame required to cover your new market entry investment?
* Maintaining technical advantages requires quality, technical talent. If your current technical staff is over burdened or limited you will not compete
12) Fit with existing company resources:
* Can your company absorb the financial, emotional and physical changes required to effectively compete in the new market?
* New markets often require new, certainly more, talent and personnel
13) Fit with established customer perceptions:
* How will your existing customers be affected by your pursuit of a new market and new customer base?
* It is critical to define and evaluate your existing customer’s perceptions of all your major stra
Over the next 15 years, the U.S. economy will experience an unprecedented increase in the number of businesses for sale as baby boomer entrepreneurs begin to retire. The result will be a significant increase in the number of available businesses. Experts believe this will create downward price pressure for many privately owned companies.The baby boomer generation has been one of the most entrepreneurial generations in the history of our country. During the last 30 years over 5 million businesses with annual revenues ranging from $1 million to $75 million were founded. The owners of most of these businesses are now 50 years old or older and beginning to think about retirement. Recent studies by PriceWaterhouseCoopers, MassMutual and Marquette University showed that one out of two businesses will change hands between 2006 and 2016.Ken Dychtwald, a nationally respected d
* Understand your costs to enter a new market before you assume your revenues
* Sales projections are typically too high and cost estimates too low in new business ventures
3) Long term sales potential:
* Accelerating advances in technology reduces long term customer retention possibilities. In many markets customer needs are constantly changing.
* Priority should always be give to retention of existing, short term revenue streams, ultimately the best means to fund potential long term growth
4) Relative Profitability:
* Is return on investment greater via a new product or pursuing another market?
* It is always less costly to grow profits from existing customers in existing markets than to pursue new customers in new markets
5) Ease of product distribution:
* New markets are often best penetrated with non traditional distribution/ sales representation
* Does this potential market “fit” with your current distribution structures?
6) Post sale service requirements:
* Product/ service information demands of new market customers can require more and new forms of post sale customer service
* Technical support for state-of-the-art product/ service offerings can be in limited supply and very costly, difficult to staff
7) Degree of customer loyalty:
* Every market has a varying degree of customer loyalty depending on number and quality of competitive product/ service offerings
* Do key targeted users within the new market buy on product/ service value or well established relationships with existing suppliers?
8) Time required to get into the market:
* Product/ service “life cycles” in some industries last only a couple of months
* Can your company develop, test, certify and fill distribution channels of a short life cycle product/ service within the time frame required?
9) Anticipated competitive response:
* New market entrants are greeted with new competitive marketing tactics upon entry by established suppliers who seek retention of existing market share
* Will existing pricing levels remain once you have entered the market?
* How will market pricing degradation eventually affect your margins and ROI?
10) Number of viable competitors:
* If there are a relatively few number of viable competitors participating within the targeted market, it may more than
justify your market entry
* Sometimes it is less expensive to acquire an existing, resource limited, market participant than try to take market share with a new approach
11) Ability to maintain a technical advantage:
* Can you protect your technology within the time frame required to cover your new market entry investment?
* Maintaining technical advantages requires quality, technical talent. If your current technical staff is over burdened or limited you will not compete
12) Fit with existing company resources:
* Can your company absorb the financial, emotional and physical changes required to effectively compete in the new market?
* New markets often require new, certainly more, talent and personnel
13) Fit with established customer perceptions:
* How will your existing customers be affected by your pursuit of a new market and new customer base?
* It is critical to define and evaluate your existing customer’s perceptions of all your major stra
Tis the season when we are wracked with indecision on who to buy for and what to buy. We don’t want to insult anyone, but neither do we want to bust our budgets. Here are some of my thoughts on this dilemma.First of all, this is not a competition or at least it should not be one. The largest or most expensive gift is not always the one most appreciated.Make a list – a short list. Your gift giving list should include your immediate boss and perhaps those co-workers you think of as friends. If this gets uncomfortable because of your co-workers are less than what you consider worthy of your hard earned cash, then you might want to take the gift giving for those who have earned your respect and trust out of the office environment. For example, share a lunch with the few you wish to give gifts to or send the gifts to their homes. Hopefully they will recognize and respe
* Technical support for state-of-the-art product/ service offerings can be in limited supply and very costly, difficult to staff
7) Degree of customer loyalty:
* Every market has a varying degree of customer loyalty depending on number and quality of competitive product/ service offerings
* Do key targeted users within the new market buy on product/ service value or well established relationships with existing suppliers?
8) Time required to get into the market:
* Product/ service “life cycles” in some industries last only a couple of months
* Can your company develop, test, certify and fill distribution channels of a short life cycle product/ service within the time frame required?
9) Anticipated competitive response:
* New market entrants are greeted with new competitive marketing tactics upon entry by established suppliers who seek retention of existing market share
* Will existing pricing levels remain once you have entered the market?
* How will market pricing degradation eventually affect your margins and ROI?
10) Number of viable competitors:
* If there are a relatively few number of viable competitors participating within the targeted market, it may more than
justify your market entry
* Sometimes it is less expensive to acquire an existing, resource limited, market participant than try to take market share with a new approach
11) Ability to maintain a technical advantage:
* Can you protect your technology within the time frame required to cover your new market entry investment?
* Maintaining technical advantages requires quality, technical talent. If your current technical staff is over burdened or limited you will not compete
12) Fit with existing company resources:
* Can your company absorb the financial, emotional and physical changes required to effectively compete in the new market?
* New markets often require new, certainly more, talent and personnel
13) Fit with established customer perceptions:
* How will your existing customers be affected by your pursuit of a new market and new customer base?
* It is critical to define and evaluate your existing customer’s perceptions of all your major stra
Knowing which books to offer on Amazon can mean the difference between a good income stream and total failure. Here is what you need to know.First, how do I sell books on AmazonAmazon.com has a feature called Amazon Marketplace. This service lets you sell your used books, CDs, DVDs, etc. just by listing their code number (ISBN number for books, etc.) Listings can literally be completed in a minute or less for each item you sell. It does take a few minutes to set up a selling account but there is no charge for doing so. In fact the only time you incur a charge is when something actually sells.There is one small negative to this approach. It only works with products that have a code number. So if you have antique books or other items without a code number, you will need to set up an amazon shop. There is a monthly fee for setting up a shop but the fees that amazon
* If there are a relatively few number of viable competitors participating within the targeted market, it may more than
justify your market entry
* Sometimes it is less expensive to acquire an existing, resource limited, market participant than try to take market share with a new approach
11) Ability to maintain a technical advantage:
* Can you protect your technology within the time frame required to cover your new market entry investment?
* Maintaining technical advantages requires quality, technical talent. If your current technical staff is over burdened or limited you will not compete
12) Fit with existing company resources:
* Can your company absorb the financial, emotional and physical changes required to effectively compete in the new market?
* New markets often require new, certainly more, talent and personnel
13) Fit with established customer perceptions:
* How will your existing customers be affected by your pursuit of a new market and new customer base?
* It is critical to define and evaluate your existing customer’s perceptions of all your major strategic moves
14) Financial status of key targeted customers and market share mix:
* Are key targeted customers financially stable?
* Is there a diverse mix of new market participant market shares?
The justification of entry into a new market segment involves effectively identifying viable competitors, relevant target market attributes, competitor and key customer market shares while correctly defining your company’s current financial, technical and human resources.
For marketing and sales management this 14 market attribute checklist is more intuitive than measurable. However, it is an excellent means to initially come to a “pass or fail” decision before any additional resources are applied to any market expansion effort. If you want to further quantify this analysis you can numerically weight each market attribute with your own specific market attribute priorities and give numerical “grades” to any or all new market entry candidates to calculate a weighted value for any new market.
Like trying to address any noteworthy marketing challenge, whatever you can do to quantify and measure your potential marketing alternatives, the more relevant your analysis, the better your management decisions will be.
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