Unlocking the full market potential is analogous to opening a door lock. For the market’s door to wide open, the key’s ridges (all the components of your value- proposition) must match the configuration of the lock’s pins (the market).
This approach entails performing two distinct types of activities: on one hand, figuring out the ever-changing “combination” of the marketplace which is essentially an exercise in market research (field and desk) and, on the other hand, conceiving a value-proposition and marketing mix to match that configuration, which involves a great deal of product management and organizational leadership.
Organizations need professionals with the knowledge and tools, and the skills to apply them i.e.”marketsmiths”, and, as important, to enable them do their work.
If it is that Simple, So Why Do Organizations Struggle?
It’s simple all right, but the devil lies in the details of execution.
- Firstly, working out the market’s configuration is not easy. It requires advanced capabilities in market research and analytics. These involve collecting firsthand marketing intelligence by being fully immersed in the sales activities and interacting with all market participants (buyers, channel partners and all other stakeholder groups) as well as conducting extensive desk research. The first will provide you firsthand insights into the pulse of the market and the dynamics among the market participants, and the latter will provide you the macro-perspective which you will need to understand the market trends over time, past and future. All this data needs then to be fed into a database specifically designed and continually upgraded, to capture it, process it and to generate accurate and meaningful answers to all sorts of managerial questions (strategic and operational).
- Secondly, re-designing the value-proposition and associated marketing mix (service/product portfolio, distribution channels, promotion mix and pricing) requires first-class organizational leadership. Without strong working relationship between the front-line and Product, Marketing and Pricing groups, the organization will never be able to adapt all the components of its value-proposition to match the market’s realities in a timely fashion.
- Thirdly, this is a highly dynamic situation that involves constantly moving parts. It’s not enough that you hit the right combination once because the market side is continuously changing, which necessitates relentless effort on your side to keep up and remain in-tune.
- And finally, in small and medium enterprises, it may not be easy to hire professionals with such combined advanced business and product development and leadership capabilities. In large organizations, complacency, inertia, complexity of scale and power play all may come in the way of taking timely action.
Symptoms of “Lock-Key” Mismatch
Most organizations fail to unlock the full market potential because at a given moment in time, one or more components of their marketing mix is out of alignment. Figuring out that you have misalignment issues is rather simple compared to diagnosing and fixing it.
- New Product / Service – You will notice that success remains sort of localized, scattered and opportunistic in nature. The product/service is not really able to take off, being crippled by those components that are not in full alignment with the larger market’s configuration.
- Established Product / Service – You will see your market share erode, signaling that something has derailed. The real danger is when the organization fails to spot issues of misalignment before it’s too late, misdiagnose the issue or insist on the wrong fix. It can cost them their own existence.
Here are a few common examples of misalignment scenarios.
1. Portfolio Mismatch
This may generate from either product/service’s over-design or under-design. The first will result in waste of development resources and causes complexities in promotion activities, and the latter will cost you missed opportunities.
Your goal is to ensure that you have a strong product/service proposition for every viable market opportunity and that you eliminate any redundancies that does not address a specific and viable market.
2. Distribution Mismatch
This may result from choosing the wrong distribution strategy (direct or indirect) or aligning your organization with under performing channel partners.
Your goal is to ensure that your distribution channels, whether direct or indirect, are “battle ready” i.e they can carry your proposition to the target market, they command the highest market share and that you, as an organization, claim the lion’s share of their business.
3. Promotion Mismatch
Every audience group has different buying motivations and reasons according to different metrics. Make sure that your value-proposition and related marketing material is tuned to the specific “frequency” of your target audience.
4. Pricing Mismatch
If you got the first three right, you should be able to get away with some misalignment in pricing. Otherwise, every misalignment in the other components of your marketing mix will have to be compensated for with lower pricing.
The Work of the “Marketsmith”
There is some good news and some bad news to this. The bad news: there is no substitute or short-cuts to the know-how. Figuring out how to perform each of those activities is both industry and business-line specific and you must learn and refine your approach through practice. In other words, you have to make your own key, there’s no passe-partout.
The good news is that the know-what can be explained.
Step 1: Figure Out the Configuration of the “Keyway” i.e. the Market
The world’s best strategist cannot come up with a half decent plan without reliable market intelligence.
Ideally, you want to have in your team someone with both the operational and strategic mindsets, as well as strong competencies in sales management, market research and analytics. They are the people who will move between the market (collecting pieces of the puzzle) and the analytical tool (re-designing it to capture and process the collected data as to produce meaningful insights).
The output of this step is an understanding that will inform the next, strategic planning.
Step 2: Craft Your Strategic Plan i.e. Fabricate The “Key”
Now, that you have figured out the market’s configuration, you need to fabricate a key that fits it.
This is an iterative, two-phase, non-linear process that involves auditing the various components of your current marketing mix for potential misalignment (opportunities for further development) and developing strategies to address them.
The product of this step is a living document that spells out the go-to-market activities and provides the marching orders.
Step 3: Execute and Keep fine-tuning.
Now it’s time to try it out. Take your adjusted key (proposition) to the marketplace and see if it works. If you did a good job in steps one and two, you are bound to see some breakthroughs immediately. Otherwise, you will know that it was something that you missed either in your understanding of the market’s configuration or in crafting your proposition. Whatever the case may be, you’ll sure know once you’ve figured it out and fixed it.
As always, different views or comments can only help expand and refine this understanding, and therefore are always welcome.