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Relying solely on ones own market knowledge very often leads to both a narrow and a biased view of the market and customer needs. But market research that does not deliver the knowledge needed to rapidly penetrate the market can be just as damaging and also wastes resources. Frequently, market research lacks critical information needed to create a good market penetration plan. To be effective, market research needs to be actionable. It needs to provide the insight and details that allows a company to deliver an offering that resonates with customers. Market research can fail to provide value for several reasons. One, it is often at too high a level,giving broad market generalities rather than actionable details. Second, it does not take company capabilities into account for segment selection. Third, it does not represent the customer view and does not specify the value customers seek. Fourth, it does not mesh with a companys internal processes, making it difficult to integrate the market research with the development and marketing processes. In summary, the market research is not actionable. The goal of market research for offerings is to provide the information to create a market penetration plan. Market penetration plans contain information such as the selected segment and its characteristics, customers that are influencers and early adapters, the value propositions sought by customers, the current offerings and their value in the market, routes to market and competitors. This is the information, if supplied in sufficient depth that enables an offering team to create competitive value. Therefore when creating the market research plan and RFP for an offering it needs to have the following elements: Selection of winnable segments consistent with the companys capabilities and business goals. It must provide the value customers seek with priority. This is the most critical element and will be the anchor for any market penetration plan. It must contain the other participants in the market, both potential competitors and partners. It should describe the influential buyers and early adapters in the market. The final output must be in a form that can feed into the companies internal processes for offering development. The choice of the initial segments are important because in order to get recognition as a leader in the market, an offering needs to acquire a noticeable market share quickly. These segments need to have synergy with the offering company's capabilities and with each other for efficiency. They must be large enough to provide a viable financial plan for the offering. However size is not the most important factor, but the ability to win market share quickly is. Successful solution companies usually have a roadmap for segments. They start with segments where they have the best capabilities and then they move to similar segments where they can penetrate without doing significant amounts of additional work. As an example a company that may start out in the computer industry might move to the telecommunications industry as its second market segment. Only when they have been successful in their synergistic first set of segments and have gained sufficient market share and recognition, do they consider moving to unrelated segments for growth. The most important information that market research can supply is the value propositions that likely buyers in the segments are seeking. These value propositions will form the basis of both development and marketing for the offering. For development, the customer value propositions will determine which functions will be included in the initial offering. The have to have functionality must be included in the first release. Lesser customer needs can be added in later releases as customer feedback indicates. For marketing, customer value propositions will determine what the marketing messages will be. Having great functionality in an offering without making this clear to the market can lead to mediocre results. These messages should feed back to the customer that the offering includes those values that they seek. It is important to make sure that these are true value proposition expressed as measurable customer value and not, as an example, as speeds and feeds. The research should also provide the top buying criteria. Buying criteria will tell how customers buy, what channels they use and what they look for in a vendor. While some of these relate to brand and reputation and cannot be changed in the short term, others can influence the go-to-market plans. These would include how the offering is packaged, off-the-shelf or custom as an example. The buying criteria and customer value proposition can also be used to educate the sales force. A sales team equipped with the knowledge of what customers seek and their buying criteria are able to tailor their sales approach to the customers view. Next in importance is knowledge of the other participants in the market. Participants can be competitors, potential partners or both. For competitors, it is important to understand what value they bring to the market relative to the prioritized list of customer value sought and how they meet customer buying criteria. It has been shown that an offering that has significant advantage in value propositions and buying criteria over competing offerings will have a substantial market advantage. Knowing what the competitors bring to the market sets a baseline for the solution for customer value and buying criteria. Knowing what value potential partners provide allows a company to enhance the solution through the use of partners. These partners can bring the value to the solution that the company does not have the capability to provide. This also creates a web of solution participants that can increase the market potential and mitigate the some of the risk. A detailed analysis of when and how to use partners can optimize a solution and create leverage over competitors offerings. Market research output must easily feed solution processes to be actionable. If the resulting market research report and deliverables do not easily dovetail with company processes, then there is a risk that the market research may not be effectively utilized. Having a discussion with market research companies before signing a contract about the fit to internal processes can have two advantages: First, the market research company may make suggestions about the companys internal process that could lead to their improvement. Second, the market research companies are put on notice that their research deliverables needed to be put in a format that feeds these processes. Knowing that the market research will feed company processes allows the offering manager to integrate the results and get the development and marketing cycles started quickly. Also, if the internal processes are centered around customer value, buying criteria and partnering, making the market research feed the process will force them to provide the correct information. By defining a market research project with the market research vendor that meets these objectives, the offering team can more accurately meet the customer needs, communicate the value of the offering through good market messages and shorten the development, marketing and sales cycles by integrating the market research into internal process. The resulting offering should be in a better position to leverage company and partner capabilities, beat competitors to the market and delight important customers.
Article Source: http://www.bharatbhasha.net Article Url: http://www.bharatbhasha.net/marketing.php/217878 Article Added on Tuesday, February 23, 2010
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