ENTERING NEW MARKET
Sometimes it is obvious that entering a new market is a “no brainer” or it is perceived as the “right thing to do” because a competitor has taken the plunge or a handful of existing product or service users, within that market segment, are asking for your market participation.
Taking on a new market is an integrative decision process, cutting across a broad number of competitive issues, internal company functions and various targeted organizational entities. A decision of this magnitude should not be taken lightly because of the overall affect it can have on the total direction of your company and prudent use of limited resources. The cost of making a wrong decision here can be significant both in actual capital outlays and the opportunity costs realized of NOT pursuing another, “better” market alternative.
In Al Ries and Jack Trout’s, “The 22 Immutable Laws of Marketing”, being FIRST in a new market is everything, first is best! Sometimes deciding to venture into a new market segment just because a competitor did only makes the same decision one of duplicate failure.
Anyone who has ever been involved in sales management knows that sales personnel have a tendency to sell what they don’t have … always trying to solve all of every customer’s problems no matter whether it makes financial sense for the company they represent or not. Marketing managers also have to learn to systematically justify entering a new market not because a handful of existing market participants have asked them to enter their market.
The first step in evaluating the overall merit of entering a new market should be to discuss and determine the applicability of these 14 market segment attributes:
14 Critical Market Segment Attributes
1) The number of products/ services required to effectively compete:
* Ideally the more “full service” you can be the better your chances of success
* Customers prefer “one-stop shopping”, if you cannot provide the complete...