Change the rules of the game by switching marketplaces
There are two winning market positions. Premium Quality markets appeal to discerning buyers, competing based on experience, prestige, and quality. High Convenience markets feature products that are good enough and then compete based on price, availability, and ease of use.
There are usually viable competitors in both marketplaces, each appealing to different customers. However, sometimes competitors crowd into one market, leaving unmet needs in the other. In this situation, changing marketplaces can be an excellent strategy.
In a marketplace filled high priced products competing on features and quality, find ways to deliver High Conveniences … a good enough product that is reasonably priced and convenient. As an example,legal and medical services were traditionally both inconvenient and costly, however there were few alternatives. Recently, the empty High Convenience market space has filled up with “good enough” alternatives, low cost online legal services, urgent care clinics, and para professionals all provide acceptable service, quickly and cheaply.
Conversely when commodity products glut the marketplace, there is an opportunity for higher quality products to meet the Premium Quality market demand. Starbucks proved that coffee from the local diner or fast food place, a cheap readily available product, could be replaced in the Premium Quality marketplace by a custom house blend at double the price.
The key is to SWITCH markets. Do not add a second marketplace, attempting to be both Premium Quality and High Convenience. This is the pursuit of the Market of Unattainable Perfection and will end in a Mushy Middle compromise.
Abandon your old market position and compete on new terms.
Seth Godin discusses concepts surrounding buyer choices in “XXXXXX” . Lexus and the Olive Tree?
- Are either the High Convenience or Premium Quality Markets underserved?
- Is there a product or service that could be created to serve that type of marketplace?
- Are there barriers that prevent entry into the underserved market?
- Why haven’t others rushed into fill the gap?
- What would we have to do to make the fundamental change in product priorities? (swapping convenience for quality and vice versa)
- Culturally, how will we get our teams to understand the different drivers and priorities?