Thursday, November 24, 2011

Do you know what is driving your market?

Like the product life cycle, complete markets or market sectors can also progress through different stages over time. 


At each stage there are different market drivers, so it is important to understand how these market drivers work. During the introductory phase the target audience is small and  is characterised by innovators and early adopters. Application of new technologies can often be the driver for new markets. There are plenty of examples of markets served by products that previously did not exist – mobile telephony, the Internet – where early adopters drive the market forward. 


In growth markets, the drivers are a constant flow of new users accepting and using the product, as well as an increase in usage rate amongst existing users. The next wave of customers, influenced by the early adopters, join the market and in doing so increase the current target audience as well. Mature markets develop when there is no increase in the total population of users and existing users cannot readily use or consume more of the product. More manufacturers will also have entered the market. In mature markets there will typically be many suppliers, little real product differentiation and pressures on price due to high supply and no growth. Many industrial markets are arguably in this state most of the time, leading to excessive discounting to move the product and with suppliers experiencing falling margins. 


Declining markets are usually characterised by a shrinking total population and sometimes a decline in usage as well. This may be caused by a shift to use different solutions or simply the reason for the product need is no longer valid. 


At each stage of the market cycle – introduction, growth, maturity and decline – the marketing approach will need to address the target audiences which themselves will change and not be a constant. The proposition to early adopters and opinion formers in helping grow a new market will be quite different to marketing to an audience well familiar with the market, comfortable with the same again, resistant to change but not yet ready to move their allegiance to a new and evolving sector.

Monday, November 14, 2011

Making the most of databases

Data collated to understand and predict customer demand has become an important issue in ensuring the right product is in the right place at the right time. 


Wider choice, reflecting the shift from the supply of mass-produced goods to mass-customisation, a demand driven market and the need to manage product availability to match actual customer preference, calls for better user data. In the business-to-business world the expectation has shifted significantly towards a rapid supply of product, where once several weeks wait was acceptable. As knowing more about customers and prospects becomes increasingly important, so legislation and privacy concerns as to what information is held on databases becomes a bigger issue. But many businesses do not yet really fully utilise their existing customer knowledge to provide better targeted marketing. Few extend beyond a basic address list and often operate several unrelated address lists divided across field sales, marketing, service and accounts. When this information is pooled into a single database, then patterns begin to emerge, helping to classify your customers, by product preference or usage requirements, for example and to create a profile of their main interests and motivations for buying your products and services. These profiles can be matched to the total market population. Profiling the total population including those with similar needs to your customers, can extend your prospect database. Sending information can then be selective, so that messages they receive by e-mail or direct mail have far greater relevance. 


Experience shows that recipients of highly relevant information return a far better response rate to direct marketing campaigns, leading to improved sales closure. Mining data, generating and understanding customer and prospect profiles, helps target messages with high relevance to the recipient - leading to higher response rates. 

Monday, November 07, 2011

Including social media as part of the marketing mix


For many b-2-b marketers, social media has at best been something of a trial, a test run, a toe in the water to take the temperature. But now some companies are thinking it maybe time to include a social media strategy as part of an integrated marketing communications programme. An integrated marketing communications programme should now strike a balance between traditional media, established Internet methods and social media.

Traditional print media has been under pressure for several years due to the widespread adoption of the Internet offering greater immediacy to news and information without the need to subscribe or register for journals and magazines. With advertising revenues declining, weaker editorial content, fewer pages and fewer publications, display advertising - the mainstay of many b-2-b marcomms plans - may no longer be the best investment. Although  traditional media offers researched and audited audience data, more of your audience may now be looking somewhere else.

In the Internet era, customers and prospects are no longer passive audiences but are actively researching comparative product specific and background information themselves. So search engine optimisation became a mantra to propel company web sites high on the list for relevant search terms. Analytics packages measure visitor statistics - where they came from, what they looked at and what, if any, action they took.  Web sites and email have been the killer applications of the Internet and matured into mainstream marketing communication tools, primarily accessed via desk top or lap top computers. But this situation too is changing - just when the web site has become the main conduit for enquiries - with more people preferring mobile devices to access content and the increasing popularity of social media platforms. 
  
Social media additionally offers the prospect for ‘conversations’ between sellers and buyers, explaining and showing products and receiving feedback. Measuring and evaluating interaction varies between the different platforms, but those with advertising options allow a target audience to be specified based on user registration data. Because social media’s origins are in personal social communications, b-2-b organisations generally don’t expect their customers to use this medium for business. But it’s worth asking them the question. Do your customers use Facebook, follow on Twitter, read blogs and watch YouTube? Because social media is used to share social trivia and questionable images it is not seen as serious media for business. But then again the same people once dismissed the importance of web sites and placed labels on them to declare their site did not contain pornography!