Stephen Haines Dec 09
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The Market Drives Your Business
© Copyright 2002-2009, Sequent Learning Networks, Inc.
PM0101 Jul 09
Steven Haines -
Resume
• Founder: Sequent Learning Networks (2001) – A training and organizational advisory services firm based in NYC • Mission: improve organizational efficiency and alignment so that companies can improve the success of their products in chosen markets
• Author: “The Product Manager’s Desk Reference” • Global marketing and product management positions in major corporations over twenty-five years – – – – –
Defense electronics (Loral) Consumer goods (Maidenform) Health care and medical devices (WR Grace – Nat’l Medical Care) Telecommunications & technology (AT&T Bell Laboratories, Lucent) Software & technology (Oracle)
• Extensive Product Management best practices research • Adjunct professor, Rutgers University (twelve years) • Active membership in PDMA, MENG, CMO Council, NY Product Mgmt Assn, and other organizations • Contact: [email protected] 212-647-9100 Page 2
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
Objective
• To provide you with a solid context for making the market your primary focus • To help you identify the work activities needed to properly research your market space
Page 3
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
What’s needed to be a business leader. . . . . . or, to lead in business? • Be entrepreneurial in spirit and character • “See” the end game and get others to see it, too (strategy, vision, future) • Be committed, determined and goal directed • Exude passion and commitment (which helps motivate others) • Detect the nuances of the marketplace to identify opportunities • Understand constantly shifting customer motivations • Act with agility and adapt as needed at the speed of your market
Page 4
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
Market research Market research is ongoing effort that takes place at all levels of the organization, influencing strategic and tactical planning, as well as a variety of guiding ‘controls’ Market research provides the data that can be transformed into useful insights on which you can build actionable business, product, and marketing plans and programs YOUR GOAL is to UNDERSTAND HOW TO: – – – – –
Characterize customers Evaluate evolving customer needs and motivations Detect trends Evaluate industry issues Analyze and challenging the competition
• Create and maintain a market summary so you’re never caught off guard
Page 5
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
Why do we care about the market?
© Copyright 2002-2009, Sequent Learning Networks, Inc.
PM0101 Jul 09
Because the money is in the market!
Page 7
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
Customers
© Copyright 2002-2009, Sequent Learning Networks, Inc.
PM0101 Jul 09
Customers and segments • •
Customers are divided into groups (segments) and subgroups (targets) Each segment or target group can/should be “sized” based on: – Unique needs, buying habits, motivations, and preferences – Overarching motivations: • B2B customer want to make money, save costs, and improve their own profitability • B2B and B2C customers usually want to be efficient (save time, make life easier, etc.)
•
Revenue and profit potential becomes part of forecasts for new products and enhancements –
•
Page 9
Each group has value to the firm, either as a current customer, a prospective customer, or even as a customer of a competitor
Marketing and promotional programs can be devised that stimulate demand (and revenue) from given market segments
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
B2B customer segments are dynamic Finance
External Advisors
Executive Teams
CxO Decision Process
Most decision makers have little interest in features or functionality Internal Advisors
They care about impact on the business, ROI, and other metrics
End Users
Procurement Lines of Business
Customers don’t want vendors – they want partners who understand their business Page 10
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
You create an “experience” for your customers • Great products don’t just happen • Defining or articulating customer issues, problems, or needs requires insight into how their problem gets solved – This helps in defining product functionality, features, attributes, or designs
• Business owners must: – Think of the solution based on solving the customer’s problem (or the market’s problem) – Define solutions that impact: • How the customer will act, or • What the customer will do differently Page 11
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
How do you find out? Qualitative Research and VoC • Ideation via formal sessions/brainstorming – What do we know now? What have we seen?
• Purposeful, planned customer or field visits • Interviewing, focus groups, customer councils • Learning customer’s business operations – What they do – How they do what they do
Quantitative Research • Surveys, questionnaires, report cards • Census data Page 12
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
Industry & Competition
© Copyright 2002-2009, Sequent Learning Networks, Inc.
PM0101 Jul 09
Industry and competition • Industry – The arena in which customers and competitors meet – Paying attention helps you capture trends and potentially, capture revenue – Tends to shift over time based on a variety of influences
• Competitors – Vie for the business of customers – Split the market with a host of other providers/suppliers – Paying attention helps you capture trends and potentially, capture revenue – May narrow the “available” market for products
Page 14
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
Industry assessments with P.R.E.S.T.O. • Political – Current political systems within your geography – Global or regional conflict
• Regulatory – Governmental and legal regulations regarding your products and services (e.g., telecommunications, cable TV, pharmaceuticals, etc.)
• Economic – Indicators of prosperity or downturns – Employment or other indicators which might help understand spending patterns – Growth rates, savings rates, inventories, etc – all contribute toward understanding willingness to spend
• Social and cultural – Core consumer values, e.g., saving money, lifestyle goals
• Technological – Understanding the limits of the company’s core technology – Understanding emerging technologies
• Other influences Page 15
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
Industry research practices Why industry analysis is important?
• Identifying important trends • Determining product fit • Reinforcing company fit within the industry • Providing perspective for strategic and tactical alternatives
Page 16
Sources to secure the data? • Read industry publications/journals • Attend or speak at industry association conferences • Participate in professional associations • Cultivate good relationships with customers • Observe or read government data or reports • Review stock market analyst reports • Read newspapers (e.g., WSJ, FT, etc.) • Read business periodicals
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
P.R.E.S.T.O. Industry profile tool What is happening?
Why is it important and what is the implication?
P R E S T O
SWOT Page 17
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
Competitive assessments Important questions to ask • • • • • • • • • •
Who are your competitors? What products do they sell, and into which markets? How do they market and sell? How do they position their products? What value propositions do they assert? Who are their partners? How do they price? Promote? Distribute? Are they hiring? Firing? Who do they compete with? Competitive financial profiles – how are they doing? Generally – what have competitors been doing, what do you think they’re going to be doing in the future, and what you are going to do about it?
Page 18
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
Sizing up the competitors’ value chains How they meet the needs of their customers Primary Activities and Costs in Product/Service Delivery
Operations Supply Chain
Production or Development
Channels
Sales and Marketing -Alliances
Customer Service
Technology and Transactional Systems Human Resources Management General Administration Page 19
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
Simple competitive analysis template Name of competitor
Page 20
Name of products
Estimated market share (and supporting assumptions)
What is the strategy of the competitor, their products, and their positioning
© Copyright 2002-2009, Sequent Learning Networks, Inc.
What are the weaknesses of the competitor, their products, and positioning
What should you do to establish competitive advantage?
®
Comparing competitors Your Co
Comp 1
Comp 2
Comp 3
Comp 4
Comp 5
Product Line Breadth Product line Depth Pricing Distribution Channel Advantage Supplier Advantage Sales Force Effectiveness Financial Resources Use of Technology Technological Competence Operational Efficiency Economies of Scale Employee Morale Patents/Trademarks Market Share
TOTALS Suggest rating scale of 1 (weak) to 10 (strong). Sum all scores to see where you stand Page 21
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
Creating a summary market profile In many documents (Business Plans, Business Cases, Marketing Plans, Launch Plans, PRDs etc.) you will need to have a market profile “ready to go” about what is happening in the market. Your posture as a business owner is to have an “Always On” mindset! You are always going to be collecting data so that you can understand market size, segments to pursue, competitors to challenge, and you desired market share or focus The market profile considers the entire marketplace: industry, competitors, and customers and/or segments.
Page 22
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
Composing the market story Customer information • _______________ • _______________ • _______________
Industry information P) _______________ R) _______________ E) _______________ S) _______________ T) _______________ O) _______________
Competitor information • _______________ • _______________ • _______________
Market Story _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ Page 23
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
Summary: the importance of market research Research validates and guides: • • • • • •
Product or solution content Competitors to challenge Market segments and customers to pursue Marketing mix elements to consider Business Plan content Your ability to be more agile in a competitive market • Creation of solid, cohesive sales training and marketing programs
Page 24
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
Thank you ®
Steven Haines [email protected] 212-647-9100
Page 25
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
The Market Drives Your Business
© Copyright 2002-2009, Sequent Learning Networks, Inc.
PM0101 Jul 09
Steven Haines -
Resume
• Founder: Sequent Learning Networks (2001) – A training and organizational advisory services firm based in NYC • Mission: improve organizational efficiency and alignment so that companies can improve the success of their products in chosen markets
• Author: “The Product Manager’s Desk Reference” • Global marketing and product management positions in major corporations over twenty-five years – – – – –
Defense electronics (Loral) Consumer goods (Maidenform) Health care and medical devices (WR Grace – Nat’l Medical Care) Telecommunications & technology (AT&T Bell Laboratories, Lucent) Software & technology (Oracle)
• Extensive Product Management best practices research • Adjunct professor, Rutgers University (twelve years) • Active membership in PDMA, MENG, CMO Council, NY Product Mgmt Assn, and other organizations • Contact: [email protected] 212-647-9100 Page 2
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
Objective
• To provide you with a solid context for making the market your primary focus • To help you identify the work activities needed to properly research your market space
Page 3
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
What’s needed to be a business leader. . . . . . or, to lead in business? • Be entrepreneurial in spirit and character • “See” the end game and get others to see it, too (strategy, vision, future) • Be committed, determined and goal directed • Exude passion and commitment (which helps motivate others) • Detect the nuances of the marketplace to identify opportunities • Understand constantly shifting customer motivations • Act with agility and adapt as needed at the speed of your market
Page 4
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
Market research Market research is ongoing effort that takes place at all levels of the organization, influencing strategic and tactical planning, as well as a variety of guiding ‘controls’ Market research provides the data that can be transformed into useful insights on which you can build actionable business, product, and marketing plans and programs YOUR GOAL is to UNDERSTAND HOW TO: – – – – –
Characterize customers Evaluate evolving customer needs and motivations Detect trends Evaluate industry issues Analyze and challenging the competition
• Create and maintain a market summary so you’re never caught off guard
Page 5
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
Why do we care about the market?
© Copyright 2002-2009, Sequent Learning Networks, Inc.
PM0101 Jul 09
Because the money is in the market!
Page 7
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
Customers
© Copyright 2002-2009, Sequent Learning Networks, Inc.
PM0101 Jul 09
Customers and segments • •
Customers are divided into groups (segments) and subgroups (targets) Each segment or target group can/should be “sized” based on: – Unique needs, buying habits, motivations, and preferences – Overarching motivations: • B2B customer want to make money, save costs, and improve their own profitability • B2B and B2C customers usually want to be efficient (save time, make life easier, etc.)
•
Revenue and profit potential becomes part of forecasts for new products and enhancements –
•
Page 9
Each group has value to the firm, either as a current customer, a prospective customer, or even as a customer of a competitor
Marketing and promotional programs can be devised that stimulate demand (and revenue) from given market segments
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
B2B customer segments are dynamic Finance
External Advisors
Executive Teams
CxO Decision Process
Most decision makers have little interest in features or functionality Internal Advisors
They care about impact on the business, ROI, and other metrics
End Users
Procurement Lines of Business
Customers don’t want vendors – they want partners who understand their business Page 10
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
You create an “experience” for your customers • Great products don’t just happen • Defining or articulating customer issues, problems, or needs requires insight into how their problem gets solved – This helps in defining product functionality, features, attributes, or designs
• Business owners must: – Think of the solution based on solving the customer’s problem (or the market’s problem) – Define solutions that impact: • How the customer will act, or • What the customer will do differently Page 11
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
How do you find out? Qualitative Research and VoC • Ideation via formal sessions/brainstorming – What do we know now? What have we seen?
• Purposeful, planned customer or field visits • Interviewing, focus groups, customer councils • Learning customer’s business operations – What they do – How they do what they do
Quantitative Research • Surveys, questionnaires, report cards • Census data Page 12
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
Industry & Competition
© Copyright 2002-2009, Sequent Learning Networks, Inc.
PM0101 Jul 09
Industry and competition • Industry – The arena in which customers and competitors meet – Paying attention helps you capture trends and potentially, capture revenue – Tends to shift over time based on a variety of influences
• Competitors – Vie for the business of customers – Split the market with a host of other providers/suppliers – Paying attention helps you capture trends and potentially, capture revenue – May narrow the “available” market for products
Page 14
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
Industry assessments with P.R.E.S.T.O. • Political – Current political systems within your geography – Global or regional conflict
• Regulatory – Governmental and legal regulations regarding your products and services (e.g., telecommunications, cable TV, pharmaceuticals, etc.)
• Economic – Indicators of prosperity or downturns – Employment or other indicators which might help understand spending patterns – Growth rates, savings rates, inventories, etc – all contribute toward understanding willingness to spend
• Social and cultural – Core consumer values, e.g., saving money, lifestyle goals
• Technological – Understanding the limits of the company’s core technology – Understanding emerging technologies
• Other influences Page 15
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
Industry research practices Why industry analysis is important?
• Identifying important trends • Determining product fit • Reinforcing company fit within the industry • Providing perspective for strategic and tactical alternatives
Page 16
Sources to secure the data? • Read industry publications/journals • Attend or speak at industry association conferences • Participate in professional associations • Cultivate good relationships with customers • Observe or read government data or reports • Review stock market analyst reports • Read newspapers (e.g., WSJ, FT, etc.) • Read business periodicals
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
P.R.E.S.T.O. Industry profile tool What is happening?
Why is it important and what is the implication?
P R E S T O
SWOT Page 17
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
Competitive assessments Important questions to ask • • • • • • • • • •
Who are your competitors? What products do they sell, and into which markets? How do they market and sell? How do they position their products? What value propositions do they assert? Who are their partners? How do they price? Promote? Distribute? Are they hiring? Firing? Who do they compete with? Competitive financial profiles – how are they doing? Generally – what have competitors been doing, what do you think they’re going to be doing in the future, and what you are going to do about it?
Page 18
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
Sizing up the competitors’ value chains How they meet the needs of their customers Primary Activities and Costs in Product/Service Delivery
Operations Supply Chain
Production or Development
Channels
Sales and Marketing -Alliances
Customer Service
Technology and Transactional Systems Human Resources Management General Administration Page 19
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
Simple competitive analysis template Name of competitor
Page 20
Name of products
Estimated market share (and supporting assumptions)
What is the strategy of the competitor, their products, and their positioning
© Copyright 2002-2009, Sequent Learning Networks, Inc.
What are the weaknesses of the competitor, their products, and positioning
What should you do to establish competitive advantage?
®
Comparing competitors Your Co
Comp 1
Comp 2
Comp 3
Comp 4
Comp 5
Product Line Breadth Product line Depth Pricing Distribution Channel Advantage Supplier Advantage Sales Force Effectiveness Financial Resources Use of Technology Technological Competence Operational Efficiency Economies of Scale Employee Morale Patents/Trademarks Market Share
TOTALS Suggest rating scale of 1 (weak) to 10 (strong). Sum all scores to see where you stand Page 21
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
Creating a summary market profile In many documents (Business Plans, Business Cases, Marketing Plans, Launch Plans, PRDs etc.) you will need to have a market profile “ready to go” about what is happening in the market. Your posture as a business owner is to have an “Always On” mindset! You are always going to be collecting data so that you can understand market size, segments to pursue, competitors to challenge, and you desired market share or focus The market profile considers the entire marketplace: industry, competitors, and customers and/or segments.
Page 22
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
Composing the market story Customer information • _______________ • _______________ • _______________
Industry information P) _______________ R) _______________ E) _______________ S) _______________ T) _______________ O) _______________
Competitor information • _______________ • _______________ • _______________
Market Story _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ Page 23
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
Summary: the importance of market research Research validates and guides: • • • • • •
Product or solution content Competitors to challenge Market segments and customers to pursue Marketing mix elements to consider Business Plan content Your ability to be more agile in a competitive market • Creation of solid, cohesive sales training and marketing programs
Page 24
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
Thank you ®
Steven Haines [email protected] 212-647-9100
Page 25
© Copyright 2002-2009, Sequent Learning Networks, Inc.
®
