In today’s hyper-competitive market, nobody wants to be second best. For every consumer making a purchase, they’re typically only going to choose to buy that one product. No one needs two hairdryers, no one buys lunch more than once a day.
So if your campaign is almost excellent, your product will be the one that’s almost chosen.
And when you’re analysing the ROI of all your branding efforts, “people almost bought it” is no good to you at all.
But the reason people will choose Häagen-daz over Green & Black’s, say, often has very little to do with the product at all. The vanilla pod, the sea salt caramel, the Belgian chocolate are almost identical. Perhaps it’s in the umlaut—a hint at European luxury that you’ll notice Gü have also opted for—or the deep red stripe around the lid evoking an old-fashioned ice-cream parlour wholesomeness. Whether it’s the brand’s imagery, the whimsical titles of its products, or the associations you have with it, the way that the company has positioned their brand will undoubtedly play a part in the consumer decision process.
And yet, positioning is not really about the product at all (remember, Häagen-daz’s vanilla pods are really very similar to those of Green & Black’s). Beauty—or in this case, desire to buy—is in the eye of the beholder. And positioning is exclusively about the beholder.
It’s a concept that Al Ries and Jack Trout popularised in their seminal book, Positioning: The Battle for Your Mind. In their words:
Positioning starts with a product. A piece of merchandise, a service, a company, an institution, or even a person. Perhaps yourself. But positioning is not what you do to a product. Positioning is what you do to the mind of the prospect. That is, you position the product in the minds of consumers.
What matters most is that your product, your brand, is entering consumers’ minds first. You have to be a front-runner to have the chance to engage consumer attention, and convert their window-shopping to buying.
As Ries and Trout put it, ‘the easy way to get into a person’s mind is to be first,’ pointing out that most people could name Charles Lindbergh as the first man to fly across the Atlantic, but very few could name the second. When it comes to being successful with consumers: ‘get there first and then be careful not to give them a reason to switch.’
What is the simplest way that your brand can dominate share-of-mind? Create your own market where you can dominate.
How you can Create a New Market
At this point, we must introduce two tools: Audience Segmentation and Market Mapping. By going through both these processes, and overlaying the results, you will be able to spot pockets of emptiness, ripe for the creation of a unique niche that you can own!
First though, it’s important to thoroughly understand each of these processes.
What is Audience Segmentation
Audience segmentation deals with the consumer.
It takes the totality of all possible people who could be consumers (your Total Addressable Market), and breaks this monolith down into distinct groups.
It’s a complex process, and something we’ve dedicated a full walk-through to in another blog post.
The segments that you want to break people into can be decided by different things, but should take into account demographic information, attitudes, motivations, and behaviours.
You need to carry out thorough enough research, that you can understand why people purchase, when they purchase, and how they purchase. This way you can inform your decisions on how to position your product, since you will have a solid knowledge of the people you’re trying to reach, which is more than skin deep.
We advise that audience segmentation comprise both your current consumers, and people who don’t yet buy your brand. By looking at the general population, and not just your existing customer base, you will start to understand all the possible opportunities your brand has to ‘own’ and develop a unique, but valuable, market.
It’s just as important to know who’s buying your competitor’s products, similar or alternate options to your product, and who’s not buying your product or anything remotely like it. This will allow you to isolate and target potential buyers of the future.
When done properly, you will end up with a snapshot of all the consumers operating in a given market, illuminating the different reasons people buy one product over another; and all the potential consumer who don’t buy anything (but might do).
What is Market Mapping?
Market mapping deals with the current offering in a given market.
When you map a market, you plot all the brands that already exist, so that you have a clear picture of where you would have to go to colonise new territory.
To map your market, traditionally two variables are chosen.
The Harvard Business Review’s version takes ‘centrality’ and ‘distinctiveness’ as their key qualities to measure. In this case, you would need to conduct a survey to ask consumers about a chosen market.
You would want to ask them which brand they think of first, when thinking about the car industry, for example. You would then want to take all the brands named, and ask consumers how distinctive each brand is. Each brand’s two scores can then be used, like coordinates, to plot them on a market map.
HBR go to the additional length of calculating each company’s sales volume and price, which illuminates (via the size of the bubbles) where the upmarket and budget brands mostly lie, and where the most and least successful brands in terms of sales lie.
There’s magic in the mixing
Understanding consumers or the current market dynamics is an excellent start to looking for a niche you can command as your own. But rather than seeing either of these sets of results in a vacuum, we encourage you to think of them in relation to each other.
By overlaying the two sets of data, you will be able to see which consumer segments aren’t currently engaging in a market, and which areas of the market are underpopulated. It’s extremely likely that the two will match up, to at least some degree, and these perfect meeting points are where you want to position your brand.
For example, if we think about gym and fitness brands, there is a heavy impetus on motivated messaging. Images are of extremely aspirational bodies—uber fit people, who will probably never resemble the average gym goer—and tone is often instructive and brash, like the voice of an imaginary personal trainer. This all resonates well with people who are already quite fit, and feel excited, rather than intimidated by the prospect of getting fitter.
One consumer segment you might isolate as disinterested in current fitness brands (during your audience segmentation process) are people who are obese.
One under-populated area of the gym market you might notice (in your market mapping process) is gyms with gentle messaging, that don’t push an overly ambitious physique.
This could lead you to identifying a previously uncatered to niche audience: overweight people who want to get into exercise as a positive healthy step in their life, but feel demotivated by the thought of having ultra-fitness as the goal.
It’s a set-method way of systematically working through what currently exists (in terms of the market, and the population) in order to find a niche where you can pursue Blue Ocean Strategy. Blue Ocean Strategy chases radical differentiation, in order to create a new space where competition is non-existing, allowing you to set prices (often with much healthier margins).
In these ‘blue oceans’, rather than wrestling customers from existing brands, and asking them to shop with you instead, you create demand. Disruptor brands—brands that makes consumers say ‘I didn’t even know I needed it until it came along’—operate within these blue oceans, and their rapid growth is due to the lack of competition, and the fact that almost everybody is a potential customer.
Never mind if the niche you identify is small, and non-mainstream to begin with: often the best innovations and companies start this way.
For example Apple, (now the world’s first trillion dollar company), began as a company aimed primarily at “hobbyists, games players and computer enthusiasts”. But by focussing on this small group, and working to make a product different to anything out there—something beautiful that integrated seamlessly with design tasks—the Apple brand eventually became applicable to anyone who wanted good-looking and intuitive technology.
We see the same story playing out in the sports world. Brands that began targeting athletes with specialised gear (Nike, Adidas, USA Pro, UnderArmour, you name it) honed their look so much that they became fashionable, and now JD Sports is as much a destination for high fashion hunters, as it is for marathon runners.
A beauty salon owner and a photographer created MAC to fulfill their own needs, but by making a product good enough for professionals, soon ordinary people wanted in too.
It’s not always that something is created for professionals and then, due to the high quality nature of the product, everyone else wants it too.
If we think about alternative milks, for example, we can see that there are definitely cases where a totally different product is embraced by people who don’t really need it at all. Oatly, Alpro and Rebel Kitchen have all risen to prominence recently having targeted vegans and lactose-intolerant people with their nut, oat and soya milks, and now they are on the shelves of Tesco, with equal status to the regular old cow’s milk.
Such are the spoils of defining a new market and taking a leadership position in it.
In conclusion, if you use surveys to gather up-to-the-minute data about both consumers and existing markets, you’ll get an excellent picture of how the land currently lies, and a steer on where you need to go to explore uncharted territory that can still support your commercial goals.
Owning a niche allows you to define the rules, and pricing of the market, and will make your life a whole lot easier since you won’t have to be fighting other brands for their customers. It’s about using a strategy to thoroughly grasp which needs exist amongst consumers that aren’t being answered by the current market.
Not only will combining these two processes – audience segmentation and market mapping – allow you to locate those blue oceans, but it also means success is more likely, since you’ll know that there is a willing, underserved audience who, if you create demand, will be queuing up for your new solution.
Get in touch with us now to kick start both processes, and you could know where the next great blue ocean is within a matter of days.