Market attractiveness
Measure of the profit possibilities that lie within the structure of a particular industry or market. There are many different factors that contribute to market attractiveness. These include: (1) market factors such as growth rate and size of the market; (2) economic factors such as investment potential and industry saturation or rates of inflation affecting consumers’ purchasing power; (3) technological factors such as availability of raw materials; (4) competitive factors including the types of rival business and the bargaining power of suppliers; and (5) environmental factors such as the existing regulatory climate and the degree of social acceptance for a product within a particular market.
Competitive Position
Competitive positioning is about defining how you’ll “differentiate” your offering and create value for your market. It’s about carving out a spot in the competitive landscape and focusing your company to deliver on that strategy. A good strategy includes
Market profile: size, competitors, stage of growth
Customer segments: groups of prospects with similar wants & needs
Competitive analysis: strengths, weaknesses, opportunities and threats in the landscape
Positioning strategy: how you’ll position your offering to focus on opportunities in the market
Value proposition: the type of value you’ll deliver to the market
When your market clearly sees how your offering is different than that of your competition, it’s easier to generate new prospects and guide them to buy. Without differentiation, it takes more time and money to show prospects why they should choose you; as a result, you often end up competing on price – a tough position to sustain over the long term.
One of the key elements of your positioning strategy is your value proposition. There are three essential types of value: operational excellence, product leadership and customer intimacy.
Before you begin
Your competitive positioning strategy is the foundation of your entire business – it’s the first thing you should do if you’re launching a new company or product. It’s also important when you’re expanding or looking for a new edge.
Profile your market
Document the size of your market, major competitors and how they’re positioned.
Determine whether your market is in the introductory, growth, mature, or declining stage of its life. This “lifecycle stage” affects your entire marketing strategy.
Segment your market
Understand the problems that your market faces. Talk with prospects and customers, or conduct research if you have the time, budget and opportunity. Uncover their true wants and needs – you’ll learn a great deal about what you can deliver to solve their problems and beat your competitors.
Group your prospects into “segments” that have similar problems and can use your product in similar ways. By grouping them into segments, you can efficiently market to each group.
Evaluate your competition
List your competitors. Include any competitors that can solve your customers’ problems, even if their solutions are much different than yours – they’re still your competition.
Rate your own company and your direct competitors on operational efficiency (price), product leadership and customer intimacy. It’s easy to think you’re the best, so be as impartial as you can.
Stake a position
Identify areas where your competition is vulnerable.
Determine whether you can focus on those vulnerable areas – they’re major opportunities.
Identify products/services you can offer to meet the true needs of your market in a new and better way.
Define your value proposition
There are three core types of value that a company can deliver: operational efficiency (the lowest price), product leadership (the best product), or customer intimacy (the best solution & service). Determine which one you’re best equipped to deliver; your decision is your “value proposition.”
