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Lead to WinSlide 1
Technical Entrepreneurship
“Select and Target Market Segments”
Corien KersheyHBS Marketing
Lead to WinSlide 2
Topics
• Segment the Market
• Create Segment Profiles
• Identify Critical Flaws
• Assess Variables
• Select Target Segment
Lead to WinSlide 3
Segmentation Divides Markets into Addressable Chunks
• Segmentation separates potential customers into groups according to different buying criteria– Mobile Knowledge does not address all possible uses
of GPS• They focus on managing taxicab resources
– Cadence did not address all possible uses of high-end graphic design
• They focus on semi-conductor design tools
– Corel tried to address everybody when they bought WordPerfect
• They failed.
Lead to WinSlide 4
Target Segment is The Chunk That You Can Dominate
• A startup has a much better chance of success if it focuses on a single, unserved segment that they can dominate fast
• The target segment is the one that gives you the best chance to dominate– Corel built success on delivering easy-to-use graphics tools to the
home-user segment– MOSAID built success by designing custom semi chips for the
home electronics manufacturer segment– DELL built success by selling computers to the price-sensitive and
convenience-sensitive home/home business market
• These were unserved or underserved segments before• Of all the possible segments that were available, these
came out on top after analysis of qualifying criteria
Lead to WinSlide 5
Choosing a Target Segment is Critical to Success
• In general, studies show that between 70% and 90% of all high-tech startups will fail in the first two years
• Most startup technologies and products fail as a result of poor segmentation and targeting practices
Good Knowledge of the Market and Single-Minded Focus are the Number One Reasons
for Startup Success
Lead to WinSlide 6
Ready, Fire, Aim Doesn’t Work
• Most common start-up error is to attack a number of segments to see which will work best– No “whole product” is ever delivered to one market
– Resources are distributed among too many segments and sales, marketing, development is done poorly
– No segment can be dominated fast
– Defenses are weak and competitors can breach the segment walls easily
– Early adopters/innovators do not mirror the thinking of pragmatists
Lead to WinSlide 7
Beachhead Approach Secures Dominant Segment Position
• Focus limited resources to establish leadership in a single segment
• Gives strategic sales direction even in the very early market
• Leadership in a single segment helps build credibility with– Analysts and media– Financiers– Hard-core pragmatists– Employees– Board
• High tech buyers prefer to buy from segment leaders• Reduces the risk of failure – go find another beach• Much better chance of being first in the “mind”
Lead to WinSlide 8
Moore’s Chasm Model Illustrates Startup Challenge
Early Adopters
Chasm
Pragmatists on Main Street
BeachheadBowling Alley
Early Majority
Late Majority Laggards
Tornado
Applies to product categories, NOT to companies
Each stage requires a different approach to segmentation
Lead to WinSlide 9
Seven Steps to Successful Segmentation for Startups
• Step 1: Determine where you really are within the startup life cycle.
• Step 2: Regardless of Step 1, create as broad a definition of an addressable market as possible and then break it down in to all possible sub-segments
• Step 3: Create customers profiles for all remaining sub-segments
• Step 4: Assess profiles again critical flaws criteria and eliminate those that fail
• Step 5: Assess remaining profiles against selection variables continuously until top segment remains
• Step 6: Test target segment against SWOT and performance goals
• Step 7: If no segment apparent, repeat process
Lead to WinSlide 10
Chasm
AtomizedSegmentationfor Innovators
ConcentratedSegmentationfor Beachhead
DifferentiatedSegmentation
for Bowling Alley
Step 1: Find Where You Are Relative to the Chasm to Determine Segment Strategy
Lead to WinSlide 11
Three-Step Segmentation Strategy Helps Startups Succeed
Mix 1
Mix 3
Mix 2
Segment 1
Segment 2
Segment 3
DifferentiatedMarketing – bowling alley,pragmatists, maturing
Company Marketing Mix
Segment 1
Segment 2
Segment 3
ConcentratedMarketing – startup, beachhead strategy
Company Marketing Mix
Customer 1
Customer 2
Customer 3
Atomized Marketing – early adopters and innovators – true 1-to-1 marketing
Tim
e
Lead to WinSlide 12
Characteristics of Early Adopter Market
• New technology with first product still in development or at early Release 1.0 stage
• Angel, seed or small first round financial situation
• No customers or small set distributed widely across different vertical or horizontal markets
• Sales are growing
• Buyers are technology people within customer organizations
• Product “story” revolves around the “coolness” of the technology
• Sales-led with no marketing communications effort
Lead to WinSlide 13
Characteristics of the Chasm
• Sales growth has slowed• Starting to see some competition perhaps• Sales asking for constant product changes to close deals• Prospective customers fail to understand the product’s
“technology” story• Additional early adopter buyers are not coalescing around
any particular vertical or horizontal market• Additional financing is often proving difficult to obtain• Often many partners and resellers signed up but little or no
results• Product management struggling to identify product
roadmap and technology roadmap
Lead to WinSlide 14
Step 2: Define the Total Addressable Market and Then Narrow Down
• Brainstorm the possible broad applications for your technology
• Build hierarchies for each one until you have multiple “application trees”– Vertical waterfalls
– Cross-horizontal segments – vertical cuts on horizontal technologies
– Suppliers and channels
– Think in terms of the buyer, NOT the organization
• Layer reasonably but go at least four deep if possible
• Some technologies will have many applications: others will have a more limited application scope
Lead to WinSlide 15
Good Segmentation Narrows the Focus and Leverages Resources
Anyone Who Needs to Locate Anything that Moves and that is Big Enoughto Carry a Receiver and That is Outside for Any Length of Time
GPS Segmentation Example
Vehicles People Animals Cargo Icebergs
Trailers PlanesCars Rail Cars Earth Movers Ships
LivestockPressTankTankersDry CargoReefersContainer
Freezer Refridge
High Perish Low Perish
Flowers Produce Meat
Indies Carriers Corporates
Lead to WinSlide 16
Topics
• Segment the Market
• Create Segment Profiles
• Identify Critical Flaws
• Assess Variables
• Select Target Segment
Lead to WinSlide 17
Create Segment Profiles
• Upon completion– You will know about
• Using customer profiles to understand segments
– You will know how • To create a profile of a typical customer in a segment• To determine the customer’s pain point• To create a before/after picture of the customer’s pain after
adopting your solution• To focus on the customer as an individual rather than as a
company• To determine the potential value of your solution to the
customer and the segment• To group segments into related segments
Lead to WinSlide 18
You Can’t Really Know What the Beach Looks Like Till You Get There
• Beachheads have no ‘hard data’
• Company has little or no experience with the beachhead target segment
• No similar products are serving that segment
• No credibility with which to gain information directly from pragmatists in segment
• Innovators/early adopters are different from pragmatists and cannot be used as models
• High-level market size projections are generally untrustworthy and erroneous
Lead to WinSlide 19
Step 3: Create Multiple Target Customer Profiles
• In most startups, the product is looking for a target segment– Usually begun with a technology bias
– Were this not true, far fewer startups would fail
• With little useful and specific market data available, turn to building a profile of the potential customer– “informed intuition” rather than “analytical reason”
• Be wide and ranging in your approach– Current early adopters, lost deals, profiles in related categories,
your own experience, ask friends and family for ideas, brainstorm
Lead to WinSlide 20
Define the Prospect’s Current Problem with These Questions
• What problem causes the pain or frustration? Sketch a scenario in which the customer attempts a task and feels pain as a result.
• How does the customer try to cope with the problem now?
• What is causing the problem? What is interfering with a speedy solution? What goes wrong and why?
• How much money is the customer losing, either in additional costs or lost revenue? Quantify the pain.
• Who is the individual who feels the pain first and how does it “waterfall” up or down?
• Who else feels the pain? The customer’s customers? Suppliers? Partners? Investors?
Lead to WinSlide 21
Profile Example – Pain Scenario
Frustration Point
Costs
Current Solution
Stakeholders
Cause
Pain SolutionFleet mgrs misplace 5% of loadedproduce reefers due to admin anddriver problems
Avg. value of lost or spoiled cargo is $250K -- $12 million total for avg carrier + high ins. rate
Insurance pays 75% of value and rest is written off as tax loss
Produce distributors; supermarket owners; truck drivers; insurance company; carriers
Many trailers being managed at once:Inadequate admin techniques; careless reporting by drivers; late loads
Characteristic
Lead to WinSlide 22
Align Your Product to Their Problems With These Questions
• Define the customer’s changed situation– How does the customer approach the task differently? – Is the pain removed or is it lessened. For whom? – Are new problems introduced as a result of your
solution?– Is your solution better than any other way the customer
had of solving the problem? Why?– How does your solution remove the pain? – How much money will the customer gain as result of
your solution, either as cost savings or increased revenues?
– Can you determine a time frame for payback?
Lead to WinSlide 23
Profile Example – Solution Scenario
Frustration point
Costs
Stakeholders
Cause
Pain SolutionFleet mgrs misplace 5% of loadedproduce reefers due to admin and driver problems every year
Avg. value of lost or spoiled cargo is $250K -- $12 million total for avg carrier + high ins. rate
Insurance pays 75% of value and rest is written off as tax loss
Produce distributors; supermarket owners; truck drivers; insurance company; carriers
Many trailers being managed at once:Inadequate admin techniques; careless reporting by drivers; late loads
By using GPS, fleet mgrscan locate trailers before cargospoils
Cost for avg carrier including services is$3 million, providing customer paybackin one quarter and savings of $10.5 M/yr
Problem is solved easilyCurrent solution
Distributors incented to use GPS-able carriers; driver morale improves; insurance easier and cheaper to get; insurance push?
Root causes difficult to eradicate causebased on human error: GPS-enablingsolves problem faster and cheaper than changing behaviours
Characteristic
Lead to WinSlide 24
Create Groups According to Similarities
• Be creative and open in building profiles
BUT• Unless you have unlimited time and money, rationalize all
the profiles into segment groups– Out of 50 or so profiles, about 10 segments will likely coalesce
– Look for key similarities• Vertical markets
• Common problems and pain points
• Similar economic impacts
• Similar groups of users
Lead to WinSlide 25
Topics
• Segment the Market
• Create Segment Profiles
• Identify Critical Flaws
• Assess Variables
• Select Target Segment
Lead to WinSlide 26
Identify Critical Flaws
• Upon completion– You will know about
• What the binary criteria are for success in a segment
– You will know how • To assess segment customer profiles against each criteria
• To eliminate immediately segments in which you stand little chance of success
Lead to WinSlide 27
Step 4: Assess Profiles Against Critical Flaws
• Assess each profile against 5 key criteria that can “make or break” your chance of succeeding in that segment
• Ask and answer a series of questions and rate the answers on a binary scale of yes or no. Include a sentence or two on why.
• Eliminate any that fail and set aside all related segments
Lead to WinSlide 28
Do They Have a Reason to Buy?
• You may think it’s great, but will the customer?• Is the financial impact of the problem severe enough to
drive the need of a solution– There are lots of problems that pragmatists will live with rather
than take a risk that could have worse consequences
• Of all possible ways of solving the problem, is yours the obvious choice from the point of view of– Total cost – including “whole product,” installation, services,
training and adoption costs– Speed to implement– Ease of use and adoption– Maintenance and support– Stability of technology and company
Lead to WinSlide 29
What Do They Actually Need to Buy to Solve the Problem?
• Is it practical to deliver the “whole product”?
• Do you have the right partners to deliver the “whole” product?
• How well established are those partnerships?
• Can you establish the right partners and be productive with them in the time frame needed to enter and dominate that segment early and fast?
• Who do you need to partner with and is it reasonable to assume that they will come on board with you?
Lead to WinSlide 30
Who Else Can They Buy From?
• Has someone else beat you to the beachhead?– If yes, reconsider or develop a second-entry strategy
• Are there barriers to entry that protect you in that segment for sufficient time?
• Are there players in related product categories that can move into your space quickly?
• Is there potential confusion among categories within similar segments?
• Is the segment characterized by a “single vendor” approach?
Lead to WinSlide 31
Can They Buy?
• Does the segment have a ‘target customer’ who has buying power?– Is there a single person who feels the most pain?
– Is that pain tied to revenue loss or additional costs?
– Does the buyer have a budget for the “whole” product?
• Is the financial pain felt by someone with buying authority?
• Trying to fix bad segmentation with smart selling doesn’t work– Lots of effort spent identifying and winning sponsors and champions
– Endlessly long sales cycle
– Uncommitted budgets
– Uncommitted management ready to cut projects on a whim
Lead to WinSlide 32
Binary Answers to Critical Flaw Criteria
Criteria Yes No Reason
Segment: Produce Reefer Location for Carrier Companies
Compelling reason to buy √
5% of trailers misplaced, 3% stolenCarrier liable for both, loss per avg. $275K/yr; customers punish carriers with high loss
Deliver whole product √ Make entire receiver; partnership with mounting
and antenn partners; have installation partners
Buyer with economic power √
Risk managers and CFO feel greatest financial pain; drivers docked for misplacement
No competition Cell-based communications services provide GPS within acceptable margin of error whereservice available
√
Lead to WinSlide 33
Topics
• Segment the Market
• Create Segment Profiles
• Identify Critical Flaws
• Assess Variables
• Select Target Segment
Lead to WinSlide 34
Assess Variables
• Upon completion, – You will know about
• What assessment variables are important to selecting a target segment beachhead
• How each of those variables can affect your success
– You will know how• To rate each customer segment profile against the assessment
variables
• To determine your ability to overcome shortcomings or change your ability to satisfy the requirement
Lead to WinSlide 35
At What Price Will They Buy At?
• Can you deliver the “whole product” at a price that is consistent with the segment’s budgets?
• Is the price commensurate with the customer’s financial loss?
• Is there enough margin in the price to ensure all levels in the channel are adequately compensated?
• Can you deliver the “whole product” at a price that will win share rapidly without going under?
Lead to WinSlide 36
How Are They Going to Buy?
• Do you have the right sales channel to reach that segment?
• If not, can you establish timely relationships with the right channel partners/
• Do you have any expertise with the segment or the dominant vertical in the segment?
• Do you have or can you obtain someone with the right rolodex to take you into the segment quickly?
• Can you compensate everyone in the channel sufficiently to keep their interest and loyalty?
Lead to WinSlide 37
Why Should They Buy From You?
• Is the segment reachable?– Is there a set of communication vehicles that can reach them?
– Do you have the resources to market adequately?
– Will the channel participate in tactical marketing?
• Do you have any credibility with this segment?– Can you deliver a “whole product” and can you commit to it?
– Can you build credibility fast enough to hold back bigger players in associated product categories?
• Can you talk their talk?
Lead to WinSlide 38
Is the Segment Small Enough?
• Large segments are usually heavy with competition
• Choose a segment that is small enough for you to penetrate to a critical mass and dominate– This means capturing 50% of market share measured as dollars
and units
– Can you capture 50% with the resources available to you?
– Can you service 50% without burning out?
• Choose a segment that is large enough to meet your revenue projections– If 50% of the segment won’t meet forecast, dump it
Lead to WinSlide 39
Will the Segment Survive?
• Is the segment at risk for its own survival?
• Are there signals that the segment is failing in terms of– Product category adoption rates growing or failing
– Financial stability
– Competitive saturation
• Can you estimate the remaining lifespan of the segment?
• Does the segment exhibit innovation characteristics or is it know for technological conservatism?
Lead to WinSlide 40
Can You Identify Lead Customers?
• Does the segment have identified buyers who have a history of innovation and early adoption?
• Have they deployed their early buys or kept them in the lab?
• Do they have the support of their organizations?• Have they a history of championing early technologies
publicly?• Is there one or two organizations that feel the pain more
acutely?• Will they participate in the design, development, test
process?• Are they open to an over-time payment model?• Do they have credibility among potential investors?
Lead to WinSlide 41
Are There Adjacent Segments That You Can Jump To?
• Beachhead segment is the “head pin” in the bowling alley
• What close segments are a natural segue? Refer back to the application trees.
• Are they likely to still be available?
• At what point can you begin to attack the next segment?
• Are there enough close segments to achieve breakeven and profitability over time?
Lead to WinSlide 42
Step 5: Rate Remaining Segments According to Variables
• Rank each variable on a scale of one to five
• Rank all segments and eliminate weakest 50%– Use totals as an overall indication
– Weight variables according to your flexibility or ability to change your situation
• e.g. software has much more flexibility on pricing
• e.g. no existing channels but ability to establish the right partnerships
• e.g. offered technology will increase segment stability
• Repeat ranking exercise until top one or two segments revealed
Lead to WinSlide 43
Ranking Example
Segment: Produce Reefer Location for Carrier Companies
Criteria Rank Weight Reason
2
Channels
Price
Final
Segment Size
Innovators
5 4No established price, dev is capitalized,direct sales, 90% software margin, 1 year runway
4 3 4Preferred direct model, upfront cost high, greater risk, no proliferation, totalcontrol
3 2 3
2 4 3
Segment size large to achieve 50% penetration and domination; no ability to change; potential to narrow segment
Trucking industry conservative; satellite technology accepted; 2 known innovative risk managers
Totals 11 14 14
Lead to WinSlide 44
Topics
• Segment the Market
• Create Segment Profiles
• Identify Critical Flaws
• Assess Variables
• Select Target Segment
Lead to WinSlide 45
Select a Target Segment
• Upon completion,– You will know about
• The final four tests before selecting a beachhead
• The importance of a SWOT analysis
• The importance of a financial goal
• The importance of performance goals
• The importance of assessing risk of failure
– You will know how• To apply a SWOT analysis to the target segment
• To establish performance goals
Lead to WinSlide 46
Step 6: Rate Final Segment Against Final Criteria – Can You Win It?
• Undergo a SWOT exercise in relation to segment– Involve all internal stakeholders and decision makers– Rate chances of success against corporate weaknesses and
strengths– Assess segment honestly against core competencies
• Technology bias• Marketing ability• R&D ability
• Build one and two year financial models to assess revenue potential, profitability, share, growth
• Can you live with the risk of failure– What is the cost of failure?– Can the company survive?
Lead to WinSlide 47
Establish Performance Goals
• Set in quantifiable measures – Define the performance dimension e.g. absolute share, increase in
share, revenue
– Define the index – units, dollars, percentage
– Target – 50% share, $1 million in revenue, breakeven
– Time – within a year, a quarter, a month
• Ensure that goals are compatible and not mutually exclusive– High share goals do not live with high profitability
– High revenue goals do not live with short time frames
– Taking competitor’s share does not live with increased penetration
Lead to WinSlide 48
And the Winner Is!!
• Critical that everyone buys in
• Deal with subversion early and quickly
• Promote a “disagree and commit” philosophy
• Establish short-term tactical goals to ensure meeting overall product performance and corporate goals
• Begin planning for the next segment as you attack the beachhead– Understand sooner rather than later your next steps should you win
– And should you lose
• Speed is critical to keep competition at bay and win mindshare and real share
Lead to WinSlide 49
Technical Entrepreneurship
“Positioning to Win”
Corien Kershey
Lead to WinSlide 50Slide 50
Topics
• Find your positioning platform
• Create a positioning statement
• Establish a branding platform
Lead to WinSlide 51Slide 51
Find Your Positioning Platform
• Upon completion,– You will know about
• What positioning is
• Why positioning is critical to your success
• The six rules of positioning
• The seven steps to successful positioning
– You will know how to• Determine the important attributes to your customers
• Map your ability to “own” an attribute and defend it
• Select one or two key attributes on which to build a positioning and branding program
Lead to WinSlide 52
Brand is a Contract and Guarantee
Position is the single attribute that your customers will identify you and your products by
Brand is the psychological contract between you and the buyer that you will always deliver the expected
attribute in return for the expected price.
Lead to WinSlide 53
Position Locates Your Product in the Customer’s Mind
• Marketing is a battle of perceptions, not products– What the customer thinks is the only reality that matters
– Superior technology alone will not win
• Positioning determines how your customers perceive you in relation to your competitors
• Good positioning focuses on one key attribute that is important to your target segment
• Think of positioning as placing your product on a two-dimensional plan in relation to your competitors
Lead to WinSlide 54
Positioning is Placing Yourself in the Customers’ Mind
SportyConservative
Low CostAffordable
ExpensiveHigh End
Mercedes +
Lincoln +
Cadillac +
Volvo +
Porsche +
Lexus +
Nissan +
Honda +
Acura +BMW +
Saab +
Toyota +
Chevrolet +Dodge +
Ford +
Plymouth +
Hyundai +
Chrysler +
Buick +
Lead to WinSlide 55
Branding is the Consistent Expression of Your Position
• Branding is NOT just colours, logos and taglines• Good branding is ensuring that everything that the
customer experiences about your product is consistent with the position– Price– Quality– Delivery system and sales approach– Advertising and marcomm messaging– Customer service– Product functionality and specifications
• Good branding also creates a look for your product that is immediately identifiable and immediately evokes the position (values and attributes) that you claim
Lead to WinSlide 56
Brand Equity is Your Most Valuable Asset
• Brand equity builds brand loyalty– Builds profitable repeat customers– Protects market share– Protects profit margins– Directs innovation and technology/product direction– Provides a definable market that can be addressed with given
resources– Makes it easier to measure yourself against competitors
• More defendable than most IP– Well-defended positions are difficult to steal– For most companies, owning a clear and defendable market
through a clear position is more valuable and attainable than patent protection – patents don’t force people to buy
Lead to WinSlide 57
Nine Rules Govern Positioning and Branding
1. You MUST be able to deliver the promised position
2. Be the first in the mind with your attribute in your product category
3. You cannot claim an attribute that another product owns
4. Do not claim an attribute that is not important to your customers
5. Only claim an attribute that you can competitively defend
6. You must always defend your position and your attribute
7. You can only position relative to your competitors
8. Communicate your position through consistent branding
9. Good positioning is a long-term commitment and requires inflexibility
Lead to WinSlide 58
Eight Step Process to Establish Position and Brand
Step 1: Identify the target segmentStep 2: List all the critical attributes important to the target
segmentStep 3: Establish and map your ability and those of your
competitors to deliver those attributes Step 4: Identify and map your competitor’s ability to
deliver and to attack your advantage Step 5: Create three positioning statementsStep 6: Select the position that provides the greatest focusStep 7: Select an execution approach based on six techniquesStep 8: Establish and execute a branding plan
Lead to WinSlide 59
Step 1: Target Segment Defines Positioning Options
• A startup has a much better chance of success if it focuses on a single, unserved segment that they can dominate fast
• The right target segment is the one that gives you the best chance to dominate given available resources
• The right target segment delivers clear customer wants and needs
Lead to WinSlide 60
Step 2: Define the Prospect’s Important Needs – Do Research
• What is the target customer’s main problem?
• What are the two or three most important benefits that the target customer will seek from your solution?
• How much money is the customer losing, either in additional costs or lost revenue? Quantify the pain
• How important is cost relative to all other attributes?
• How much of the prospect’s personal reputation and feelings are tied up in the problem and its solution?
• Are you solving a problem that is on their priority list?
Lead to WinSlide 61
Step 3: Establish Ability to Satisfy Attributes – Can You Walk the Talk?
• Examine your own ability to satisfy various key attributes.– Price vs. quality/functionality
– Ability to innovate quickly
– Customer service provisioning
– Distribution and delivery systems
– Choice and selection
– Outreach capabilities
– Current position or brand identity
• Determine what attributes you have strong capabilities in
• Determine your strength in the key attributes that you identified within the target segment
Lead to WinSlide 62
Step 4: Understand the Position that Your Competitors Occupy
• You have competitors. If you think you don’t, you’re not thinking broadly enough
• Competitors can come from any quarter– Suppliers
• Home Depot is fighting Black and Decker’s decision to sell directly on the Internet
– Franchisees• Sealy was taken over by an alliance of powerful licensees
– Distributors• Pubs who run microbreweries compete directly with the big brands that they
distribute• Big brand foods must compete directly with their distributor’s label,
President’s Choice
– Customers• IBM was Microsoft’s major customer. ‘nuff said. Works both ways!
– Apathy• The problem you’re solving is not on my top 100-list so come back in 5 years
Lead to WinSlide 63
It’s Not About Where to Compete: It’s About HOW to Compete
• Phenomenon occurs in companies and industries called isomorphism in which competitors execute the same strategies at the same time– All roll out the same products at the same time
– All use the same type of messages and focus on the same attributes
– No one is first in the mind, no one promotes the product category
– The market is confused and locked in fear
• Map competitors in their relative positions to – Look for gaps in positioning among potential competitors
– Understand relative market share to assess probable winners and losers
– Avoid isomorphism, the tendency for competitors to act together
Lead to WinSlide 64
Profile Current Attributes and CompetitorsC
om
pet
itiv
e C
ho
ices
Ease of Use
Customer Access
CrossborderEase
SingleSupplier
TechnicalReliability
Fixed Cost
Three-month ROI
Cell phones Yes No No Yes Yes No No
LandlinePhone in
No No No Yes Yes No No
Current truck satellite comms
No No Yes No Yes Yes No
NewcoUsing GPS
Yes Yes Yes Yes Yes Yes Yes
Key Attributes
Lead to WinSlide 65
Overlay Defendability of Attributes Against Competitors For One Year
Co
mp
etit
ive
Ch
oic
es
Ease of Use
Customer Access
CrossborderEase
SingleSupplier
TechnicalReliability
Fixed Cost
Three-month ROI
Cell phones Yes No No Yes Yes No No
LandlinePhone in
No No No Yes Yes No No
Current truck satellite comms
No No Yes No Yes Yes No
NewcoUsing Mobile Satellite
YES YES NO Yes Yes NO YES
Key Attributes
Lead to WinSlide 66
Map Each Attribute by Relative Competitive Strength and Importance
0
6
5
10
7
8
9
2
3
4
1
Least Important
MostImportant
Attribute
Ease of Use
Cust. Access
Crossborder
Single supply
Reliability
Fixed cost
3-mnth ROI
10
N
N
N
N
N
N
N
C
C
C
C
C
C
C
L
L
L
L
L
L
L
S
S
S
S
S
S
S
Worst
1 2 3 54 6 7 8 9 CompetitiveRating
Best
Lead to WinSlide 67Slide 67
Topics
• Find your positioning platform
• Create a positioning statement
• Establish a branding platform
Lead to Win
Create a Positioning Statement
• Upon completion,– You will know about
• Positioning statements
• The two main positioning techniques
• The six techniques for executing positioning and building brand
– You will know how to• Select a positioning technique
• Articulate a positioning statement
• Assess the right position technique
Lead to WinSlide 69
Step 5: Create Three Positioning Statements
• A brief articulation of what – Your product is
– For whom it is targeted
– The benefit that it delivers
• Focus on preparing three positioning statements:1. A statement that targets product advantage
2. A statement that stresses target segment benefits
3. A statement that takes aim at competitor’s weaknesses
• Must form the first sentence of your “elevator” pitch– Must be simple enough at least for the target segment to
understand in a sales context
– Must be simple enough for the financial community to understand
Lead to WinSlide 70
Two Main Positioning Methods: Rational and Emotional
• Rational works best for high-technology/b-to-b market• Rational works best for start-ups
– Tied to hard benefits– Appeals to early majority markets/pragmatists– Results-oriented or quantifiable
• Emotional positioning better suited to consumer products or to large companies– IBM positions on Fear, Uncertainty and Doubt– Apple positions on the “personality” of the Apple user– HP positions on expressing “personal imagination”
• Be aware that there is always an emotional side effect when using rational positioning – you are talking to people, not computers
Lead to WinSlide 71
Step 6: Try Each On For Size and Select by Ability to Focus
• Use the Pitch Formula to help structure you statement– You must include Product Name, Specific Buyer or Target Segment,
Compelling Advantage or Benefit and Price/Value Statement
• Product advantage or attributePremium-priced FuseTalk is the only discussion forum with the reliability
and scalability to ensure that high-volume sites stay accessible
• Target market benefitPremium-priced FuseTalk is for support managers who need to reduce the
cost of non-complex support calls by offering service through a discussion forum platform
• Competitive weaknessUnlike other discussion forum platforms, premium-priced FuseTalk offers
high-volume site managers the reliability and scalability that they need.
Lead to WinSlide 72
Step 7: Select an Execution Approach Based on Six Techniques
• Once the statement is clear, it’s time to determine how to articulate it in a believable, compelling and sustainable way
• Six main techniques for building a positioning execution plan1. Product advantage, attribute or benefit
2. Users of your product
3. Occasions of use
4. Against an existing product category
5. Against a specific competitor
6. Association
7. A specific target market problem
Lead to WinSlide 73
Position by Product Benefit or Attribute
• Very common in technology and startup positioning
• Focus on the product or technology benefit has a high appeal both to early adopters and pragmatists
• Price tied closely to benefit or attribute
FuseTalk is the most reliable and scalable mid-priced discussion forum platform available for high-volume
sites.
Lead to WinSlide 74
Position by Users of Your Product
• Also common in technology and startup positioning
• Appeals directly to sense of personal value and convenience
• Beautifully executed by IBM – leverage the fear and uncertainty of IT managers if they can’t deliver on ambitious corporate plans
FuseTalk never crashes – and so you never have to crawl from your warm bed after you do.
Lead to WinSlide 75
Position by Occasions of Use
• Not common in technology and startup positioning
• Tends to appeal at an emotional level
• Crosses over into “user” positioning because of its emotional approach
• Can be successfully used as a “carrot” or “snob” technique
Scalable and reliable FuseTalk, the right discussion forum for when you hit that magic 1 million users mark!
Lead to WinSlide 76
Position Against an Existing Product Category
• The technique of choice for startups who need to be first in a new product category
• Usually creates a new sub-category within a larger category or splits a category
• Very dependent on good segmentation
• Focuses on a key attribute and then creates the new category – the product comes second
FuseTalk, the leading high-volume discussion forum platform specifically for high volume sites.
Lead to WinSlide 77
Position Against a Specific Competitor
• DOES NOT involve product comparisons• DOES involve repositioning existing competitor• Focuses on a key competitor weakness that the competitor
cannot easily fix• A very effective second-entry strategy • Not effective against much larger competitors – use new
product category positioning technique instead• Can be very expensive unless you focus in a very narrow
market against a specific competitor90% of UBB’s customers have less than 1000 visitors a
day. 90% of FuseTalk’s have over 1 million visitors a day. Who would you trust your forums to?
Lead to WinSlide 78
Position By Association
• Effective if you have a powerful and vocal lead customer, endorsement by a key industry group or a compelling spokesperson
• Also works when associated with images, places, events
• Marlboro’s association with cowboys and the wild West is a classic and enduring use of association
• Requires a long-term consistent program to make the right impact
• Has an emotional component
Macromedia chose FuseTalk to run their online support. Shouldn’t you?
Lead to WinSlide 79
Position by Problem
• Common high technology and startup technique
• Tied to a specific problem and proposes a clear benefit
• Gives the advantage of a very clear position
• Challenge is to ensure defendability
• Focus on ROI and cost/value equation
Answering a support question by phone costs $35. Responding to a forum question costs 35 cents. Do the
math. FuseTalk.
Lead to WinSlide 80Slide 80
Topics
• Find your positioning platform
• Create a positioning statement
• Establish a branding platform
Lead to Win
Establish a Branding Platform
• Upon completion,– You will know about
• The role of branding as the outward articulation of position
• The components of a branding program
• The key criteria for selecting a marketing agency
– And you will know how to• Choose the right image for your branding
• Know when your marketing agency is going wrong
Lead to WinSlide 82
Your Brand Promise
Characteristics
Definition
82
Lead to WinSlide 83
Step 8: Articulate Your Position Through Consistent Branding
• A brand is completely meaningless if it has no positioning behind it
• A brand MUST STAND FOR SOMETHING
• A brand must be consistent and believable
• A brand should be firm and focused – avoid the temptation to have such a broad brand that it can stand for any kind of product
• A brand is a name and a visual image that immediately evokes the position that you claim and own
Lead to WinSlide 84
Elements of a Brand
• Vision/mission
• Positioning
• Brand promise (of value)
• Brand character
Lead to WinSlide 85
Brand Pyramid
Lead to WinSlide 86
Choose a Name and Logo That Matches Your Position
• Your startup name and logo must– Focus on your product
– Evoke your category and your benefit
– Be simple, memorable and have good “decay” properties
– Elicit a mental image or emotion
– Have obvious meaning (e.g. avoid acronyms and meaningless groups of letters)
– Have an available URL if possible
– Be legally available
– Avoid being cute, cool, clever or punny
Lead to WinSlide 87
Select a Name and Logo Carefully and Use Help
Att
rib
ute
s
Characters Objects Natural Enviro.
Qualities Latin/Greco roots
No action required
AutomaticAlways
Auto
Always working -- reliable
John Henry
FireSystemsOsmosis
BeeWolfSunAnt
Dependable
No driver intervention
BreathingHeartbeat
EasePeace
Small unit/Unobtrusive
Mighty Mite
AntSeed
Tiny MicroMini
Associations for Ease of Use
Lead to WinSlide 88
Choose Your Help Carefully
• Never let an agency’s “creativity” cloud your positioning• If they cannot or will not participate or honour your
positioning and brand objectives, run!• Test, test and test and measure, measure, measure• No matter how clever the campaign, if it doesn’t plant your
product name and position, it’s a waste of time and money• Insist on a consolidated branding approach that takes in the
strategic and the tactical– High-level and sub-level messaging– Advertising and collateral– Digital and web– Events and sponsorships– Public relations and media relations
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