- Organizations entering a new market with a current product often miss key differences in markets that can make or break success
- Follow three key steps to ensure a product has been optimized for both the new market and the organization’s abilities
- When visiting a potential new market, meet with prospects, potential channel partners, and local sales reps and marketers
Entering a new market with a current product can be tricky as organizations often have blind spots to the key differences in markets that can make or break an offering’s success. During my “New Markets: Pricing and Packaging Approaches” presentation at SiriusDecisions’ Summit 2015 in Nashville, I discussed three key steps to ensuring that a product has been optimized for both the new market and the organization’s abilities.
Step One: Evaluate Buyer Needs for a Product vs. a Solution
Early in my career, I was part of team that launched a product in Mexico. While the product itself met buyer needs, we failed to realize that the market was not mature enough to have developed the infrastructure required to use the product on a day-to-day basis. It was like introducing the automobile without having a network of gas stations! In order to uncover the real extent of need across the value chain, you need to understand the complexity of the buyer need. For example, does it impact just one or multiple buying centers? Additionally, needs that are triggered by external events or regulations often require more of a solution approach from the supplier and can’t be met appropriately by a point product.
Step Two: Understand If New Market Buyers Need a Customized Offering
In some markets (e.g. finance, healthcare), customized offerings are often required to address unique market demands and to demonstrate understanding of the intricacies of a specialized market. Markets in new geographies frequently have standards, regulations or customs that demand a specialized approach. Prior to entering a new market, explore these specific differences, then calculate whether the cost of customization will pay off in a more competitive offering and importantly, increased revenue and profits.
Step Three: Appraise the Organization’s Ability to Deliver
The first two steps clarify the product packaging the new market requires. The next step is to evaluate the capabilities of your innovation and go-to-market engine with respect to solutions. If the new market requires a customized solution and your organization lacks key requirements (e.g. domain knowledge and a solution selling and marketing infrastructure), the investment in product won’t be paid off through greater sales. In this case, the organization should recognize gaps and decide whether it is best to invest in order to support all the elements required for solution success or to offer something simpler that can be better supported with the status quo.
When visiting a potential new market, meet with prospects, potential channel partners, local sales and marketers, as well as individuals who work in offering areas that are adjacent to your own. It’s through these discussions that the range of buyer segments, unique buyer needs and sentiments become visible.