In the last article, we define the market as a group of people you are trying to communicate about your product to. In short, the market is a group of people who would take an interest in your product and engage with it one way or another. Having a product is one aspect of product development but without the right people to engage with your product/services, a new product is just a waste- something that does not help anyone get closer to his/her/its goal.
In this article, we will be exploring the “market” – value was defined also in the last article as something that would help someone get closer to a goal. Now it is time to emphasise the “someone” in this article. There is absolutely no value in making the world’s best heart medication for someone who has cancer. However, some companies even market the “dream” or “inspiration” for others to work hard and buy the product in the future or at least own a piece of what it represents. For example, a Ferrari- would be sold to the top earning people but the brand would also be marketed in a small way to the mass market (in the form of shirts, perfumes etc) to create some hunger for that brand by the mass market- which would also be value for the top earning people that wants to be proud and showing the status symbol of his/her achievement. Some brands serve the top 1% but also marketed to the bottom 99% as an aspirational product or possession to own as a symbol of success. This by itself, means the product being sold to the top earners is not the car (Ferrari) or watch (Rolex) but the lifestyle of certain status.
Therefore, when developing a product/service, it is highly important to truly know what is being sold. Does Starbucks really sell coffee? Or do they actually sell a certain lifestyle with the environment? It is extremely important to define the product sold and this could also help a developer identify the market to place this (or identify the market and then develop a product that could help). To increase the chances of success, understanding the market first is key.
What are the market elements that needs to be understood?
– What do people complain/talk/discuss about? – listening and observation skills are extremely important for this.
– What does the market (competitors) currently offer?
– What in the current offerings bugs them?
– What is the price of the current offerings and how much are they willing to spend to solve this problem?
– How does someone effectively communicate the solution to the potential market?
– Where and how does the market get the product/offerings? (Channel of distribution)
If the offering is a whole new product (such as making car for those using horses or putting a camera on a phone) , then the following question (on top of the elements above) also needs to be answered. Branding and product positioning (future article) becomes extremely important.
– How do we convince the market that your current offering has predicted a future problem and therefore giving a solution right now?
– If we are innovating on a whole new offering (like making cars for those who uses horse and buggies or putting the camera into the phone), how do effectively communicate the needs of this in the future?
To innovate on a totally new offering, being able to accurately predict the market behaviour in the future plays a vital role. (tools to predict the market behaviour in the future and how to communicate your solution will be discussed in a future article).
By asking and honestly answering the questions above, the product developer would have the tools such as the vision of the offerings, cost and budget it needs to even begin the product development process. The chances of success are high if the developer answers a needs, but chances are good if the developer answers the wants. The best chance of new product development success is what the diagram above shows, what the market needs and wants and is able to acquire it at the right price (perceived value).
If the new offerings focuses on “wants”, then it needs to be communicated even more than the “needs” because the needs would spark the bulb in the consumers looking for solutions and brand loyalty increases for the solution providers.
Now that there is some idea as to what should even be worthy of being developed, the next article would focus more on the elements of what constitutes a good product development process.