Marketing Tool For Strategic Positioning
EXPLORING THE MARKET MAP
Strategic decision making and effective market positioning.
According to Nobel Prize winning psychologist Daniel Kahneman most people rely on intuitive thinking in order to make decisions. Unfortunately while this feels like the right thing to do, often leads to bad decisions that are not based on the information available and logic.
Companies, including the C-Suite, are no different. They too often rely on ‘gut feelings’ in order to make strategic decisions. The effect on companies can often be in the millions or tens of millions of dollars. When this approach is applied to market positioning it can lead to the inevitable demise of the company.
For startups, companies looking for consistent long term growth and companies that are needing to pivot the question on how to position themselves is an important one. It is arguably the biggest determining factor in whether or not the company will have a brand that succeeds or fails.
Positioning a company effectively is no easy task, in order to do it correctly we must have an in-depth understanding of the market and our competitors. I wrote about this previously in the article ‘Success Starts With The Competition’.
Given the importance, what are some methods we can use to ensure we are making strategic decisions correctly?
Strategic thinking is best done when we use frameworks and models to guide our thinking. Frameworks and models are repeatable in different situations and provide consistent and replicable results.
We use a number of exercises with companies during our Positioning and Strategy Workshops to provide them with clarity and give them a path for long-term success. One exercise you can use is the Market Map Model. The model provides a visual overview of the market and allows you to find whitespace where you can position your company with a clear point of differentiation.
This Market Map Model provides a visual representation in either a 2-dimensional or 3-dimensional way. The differences in dimensions depend on whether you want/need to look at the market based on 2 or 3 criteria.
The criteria you chose obviously differs depending on the company, the industry and the current market. However, you should always choose criteria that align with the formula for creating a successful brand. That is a criteria that can assist you with being first in a category, being good, and being different from existing brands in the space.
Say that you want to create a new car company. In order to understand the current market we want to see how our competitors are positioning themselves on a graph according to relevant criteria. On a table these criteria will be separate columns. That data can then be converted into a graph onto a 2-dimensional x-axis and y-axis, or a 3-dimensional x-axis, y-axis, and z-axis. The table makes it easy to rate the competitors, the graph makes it easy to see that data represented visually. A category could have multiple Market Maps conducted on it in order to assess different criteria and potentially find multi gaps which could be targeted simultaneously.
The 2D and 3D Market Maps would then have an axis allocated to the chosen criteria, for example:
X-axis: Quality (Is it a quality piece of engineering or poorly engineered?)
Y-axis: Price (How expensive is it?)
Z-axis: Size (Is it a small car, like a mini, or a big truck, like a F350?)
A 2-axis (2-Dimensional) example would look like the image below.
We would then be able to determine where there are gaps in the market, your niche, the industry etc… For example if we look at the basic 2-dimensional version above we could see that there is a gap for a mid-range brand on cost and quality. Once we have found a gap then we must then determine if there is demand in the form of an unserved tribe.
I would recommend spending a good amount of time choosing the criteria. The criteria is the key to finding useful insights into your market, the better the criteria the more useful the insights. As the saying goes ‘the quality of answers you get are directly related to the quality of your questions you ask’.
It is also important to not let bias influence your table and data, this would interfere with gaining a true insight into the market. Biases are often there without us knowing and for this reason it is worth also doing the market map with at least 1 other person and in an environment where you can openly debate.
Remember that this model provides you with a picture of the market and allows you to see where there are gaps. Just because there are gaps that doesn’t mean you take up that space. A gap in the market is not the same as demand. For example you could use a market map on Coffee based products and find that there are plenty of hot coffee options and plenty of cold coffee options but there is a huge gap in the market for warm coffee options. That warm coffee gap exists because there is no demand from the market, not because it’s a fresh new space waiting for a brand to dominante it.
This is a tool that will assist you in making better strategic decisions with your positioning, and strategy. It is a step to making sure you are focussing on long term success and not shiny objects that provide short term wins but hinder long term growth.