Map Your Way to Market Success

To successfully enter a new market, you need to understand the complex, competitive, and constantly changing market dynamics. It isn’t easy, as while there is a lot of data available, you need to uncover and decipher the right information. Market Maps are the perfect solution!

Mapping provides valuable insights

Market Maps provide the framework to collect the necessary data and conduct the analysis. Market Maps come in many different types (competitive, value, product, technology, positioning, partnerships & acquisition, etc.). The type of map you build is based on the questions you need answered. The key is to remember that you are analyzing the current competitors that play in and around your space to identify ways you can be more competitive. The completed map allows you to zoom in to view a specific competitor and to zoom out to determine ways to increase your competitiveness and create a Go-to-Market strategy.

Determine Customer/Product/Market Fit

One of the primary reasons company fail to get traction in a new market is the product isn’t the right fit for customers in the market. Market Maps solve this problem down to the feature level of products. Customers buy benefits to solve needs, and benefits come from features that were developed to satisfy the needs for a specific stakeholder. Those same features can then be positioned differently and can be compared against alternatives to develop a value proposition.

One of the most powerful frameworks we use to demonstrate how products fit with customers and how the product fits with the market. Most often we start by examining the product features demanded by customers and the market.

Be more competitive

Since the goal is to drive competitive thinking, we create a Market Map that includes current and future competitors. A Market Map gives you a Birdseye view of the ecosystem and competitors. The left-hand side of the map supports a feature hierarchy that will later be used to map companies that operate in this space. What you map is entirely based on what you are hoping to learn about the market. If we are interested in how to position the product, we look at how features are bundled and the added benefits from the bundle, which set of needs, are satisfied for a stakeholder group. If we are interested in technology we look at the underlying technology of each feature or set of features. The construction of the map is driven by the question or questions under review.

Enter Complex USA markets

Recently, we helped a European-based software company map the market for business software to identify opportunities and overcome obstacles. While they had many large corporate clients in Europe, they were struggling to penetrate the lucrative USA market.

We built a Market Map that primarily focused on product positioning. A dozen or so companies’ product features were evaluated. The output for this type of analysis is best shown graphically. Must-haves are defined as what the market has come to expect from these types of offerings. We develop the must-have list either through frequency analysis (how many other products have these features) or through primary customer research (what do customers expect and value). To the left are additional features that others are using to differentiate themselves and can become an opportunity for any company. 

The initial analysis showed that our client had built the right product, so why weren’t they successful selling. Interestingly, after some competitor intelligence we determined that others in the space weren’t that successful either. When we took the map out to potential customers we found something very interesting in the maturity of the market and how companies were positioning their offerings. Using the Market Map as our guide, we interviewed IT and end-users and found out where everyone was missing the mark.

Market Maps are a versatile tool

Market Maps are a highly productive way to collect and categorize competitor information. In our consulting work we have found that the construction of the market map provides insight to the market that our client’s rarely see. The map’s many uses provides another important benefit and that is the audit of intelligence and knowing where data came from and having the support to know why decisions were made. The ability to go back and update the Market Map makes it a dynamic tool that every CEO who wants to be competitive should require. 

4 Ways to Use a Market Map

Tactical innovators assess their environment through the lens of a Market Map and listen to needs through the voice of the customer, enabling a proactive response to any market change.  I would argue that for every type of business, there are at least two paths to growth: (1) compete more effectively within existing segments or (2) identify new, high value segments where you can be successful.  Here are four ways a Market Map will support either approach to increase revenue.

1. The Market Map Drives Market Sizing and Segmentation

As you know from my most recent post (Market Maps = Better Product Decisions), the Market Map provides a structural view of the markets in which your products and services compete. This handy framework forces a logical assessment of the market informed by the various angles on which you compete.  This, in turn, drives detailed customer segmentation for each of those angles and once compiled, results in a market taxonomy that lends itself perfectly as the structure for bottoms-up market sizing.

1. The Market Map and Product Roadmap Go Hand-in-Hand

With a Market Map it’s easy to see where your competitors are concentrated and what solutions hold their focus.  Through this lens, gaps in your product portfolio will quickly become apparent.  A Market Map can serve as an excellent vehicle to either validate or help you fine-tune your product development roadmap. In other words, the Market Map helps you be confident that you have made the correct decisions about where to invest so that you can compete successfully in an existing segment or expand into new segments.

1. The Market Map is Your Guide to Competitors’ Moves

The Market Map provides a framework to gather and organize data to drive tactical decisions in response to actions taken by your competitors.  But do you truly understand the “why” behind these moves?  For example, if a competitor acquires another company in your space, can you easily determine what they may have gained from the new product set or technology platform?  Was the move motivated by the need to expand into a new part of the value-chain?  The Market Map will shed light on these questions and help you come up with the right response to any move a competitor takes.

1. The Market Map Uncovers Partners or Acquisition Targets

Building new products from scratch may not be the best path to rapid growth in today’s fast-paced business environment.  If acquisition or partnership is the answer, a well-constructed Market Map can narrow your search and highlight the best companies to consider.  In this case, one of our manufacturing clients was interested in a new opportunity segment and realized the best path to market entry was indeed an acquisition. Together, we developed a Market Map that provided an informed, customized acquisition-screening filter to identify companies to investigate further.

Now that we’ve covered just four of the practical applications of the Market Map, stay tuned for future posts that pair this useful framework with the Voice of the Customer.

Market Maps = Better Product Decision

Who doesn’t love a bird’s eye perspective?  Soaring high above the trees allows you to really see the landscape.  But how do you get that same bird’s eye view for your industry?  The answer, of course, is by constructing a market map.

The market map is a cornerstone of the tactical innovator’s tool kit and provides a structural view of the markets in which your products and services compete.  You will profile your competitors, catalog different products and platforms, segment buyers and users and evaluate channels, all in the name of supporting more informed product decisions.  A well-constructed market map helps you identify:

• Product segments that are ripe for expansion
• Emerging technologies that may pose a threat
• Capabilities and competencies that can be applied to other segments
• A broader view of competitive moves
• Existing business models (those that work, as well as those that do not)
• Market size and growth rates for each product segment
• Customer opportunities available now

There are many benefits to the detailed work that goes into the market map, not the least of which is that you now have a factual basis to make decisions about how and where to invest and what strategies to pursue to deliver near-term results.  The market map provides a way to assemble detailed information to support tactical decisions about how to respond to competitor’s moves.  In addition, the market map can serve as the starting point to identify the partner or acquisition targets that will help you enter or leverage a new opportunity segment.  The power of perspective as seen through a market map provides both a wider and more granular view of any industry in which you compete.  It’s a great way to ground your team – or your entire company – with an understanding of where you fit in the market and what your path forward should look like.

Stay tuned for my next tactical innovation post that expands on the powers of the market map and how this powerful tool can work hand-in-hand with your product road map.

What's more important in new product development, team or process?

As consultants to new product development teams, the interplay of team and process is a dynamic that we think about and research on a consistent basis. It’s long been thought that the right hire outweighs a standard process.   Smart, talented teams will always figure out how to make it happen. Right? What if we put the right processes in place and train everyone? That will give us the edge that we need. Maybe?

If I can paraphrase Peter Drucker, he talks about the discipline of managing people. He says that you don’t manage people, you lead people and make them productive by enhancing specific strengths and knowledge (Management Challenges for the 21st Century, 1999). He goes on to say that one (people or process) doesn’t determine the other, but shapes the other. 

I might conclude then, as managers, we lead people and manage a process and this is holds true for new product development. To gain some insight from today’s product leaders, product development & management research reveals some interesting findings that may help answer this question. Seven years of research highlights six key tenets that will have a measurable positive effect on the success of your new products.

SIX TENETS OF SUCCESSFUL NEW PRODUCTS

1. The right functions in the organization are required to support new products and the development process.
2. The right individuals who possess the necessary skills to be successful must be hired.
3. The right set of tools and training are necessary for individuals to be successful.
4. The right metrics must be set at the beginning of the project to gauge progress and measure success.
5. The right product teams, with complementary skill sets and similar work values, must be configured.
6. The right culture has to be supported by and driven from the top.

These tenets support another of my favorite Drucker aphorisms, “success is more likely to result from the systematic pursuit of opportunities than from a flash of genius.” (The Discipline of Innovation, 1985) Our clients see the benefits in increased productivity and effectiveness by subscribing to the six tenets of successful products everyday. What tenets does your product organization live by?

Tactical Innovation Starts Here

Innovation sessions can be a daunting exercise for any company. It can take months of preparation and planning, takes employees out of the field and can often be very disappointing when the event concludes, leaving you with lots of ideas but no clear way forward. We see a new wave coming and it’s centered on little "i" innovation, tactically focused and market-driven, as opposed to big “I” innovation that looks to transform your entire business or disrupt markets. Tactical innovation is frequently "event driven" innovation; changing regulations, budget shortfalls, new entrants, or emerging technologies may drive the need for a tactical innovation workshop.

What’s Different about a Tactical Innovation Workshop?

While innovation workshops are engaging when they are in full-session, after they are over and everyone returns to their day jobs, often no one gets assigned to bring prioritized ideas to the opportunity state. Here’s how a tactical innovation workshop is different:

• You are focused on a real problem, often caused by an event, that's staring you square in the face and demanding an answer.
• You work with a cross-functional team. Basically, anyone who will touch the new product (developers, sales people, product managers, even customers and vendors) should be involved, not just for brainstorming reasons but also for resource prioritization.
• You leverage existing capabilities or establish partnerships to fill in the gaps in your organizational competencies. Development time is accelerated and new products are launched quickly. There's a difference in timeframe with tactical innovation - you're in a race to market.

Outside events are often the tipping point for creating something new. I would argue that event-driven innovation has spawned just as many new companies as has big “I” innovation, that looks to a paradigm shift for creating new business models. Get the right people in a room with a tactical innovation workshop and you’ll be on the right path to drive a consistent pipeline of new products and services.