By Peter Meyer

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Book Summary 7 - CREATING AND DOMINATING NEW MARKETS By Peter Meyer af Mind Map: Book Summary 7 - CREATING AND DOMINATING NEW MARKETS By Peter Meyer

1. The Role of the Customer

1.1. Shaping the market.

1.1.1. Shaping the market involves positioning the product so that customers view the need for the product the same way you do.

1.2. Predicting the market.

1.2.1. As many companies did in the late 1990s and early 2000s when they anticipated a market for Web-enabled telephones. Companies created cell phones that navigated the Web and sent e-mail. But no one wanted to use their cell phones for surfing the Internet.

1.3. Asking your customers to help.

1.3.1. The best strategy is to involve customers in creating new markets. Example: When America Online (AOL) asked people if they needed an online service, customers said no. When customers were offered the opportunity to join an informal group of people to chat, or to have a way to send quick notes to family and friends without having to buy stamps and mail letters, they responded positively. There are three steps to letting customers help build new markets: 1. Make sure that your business understands the problem as the customer sees it. Ask customers about the problems they have, not about products. 2. Find out how prospective customers define success for solving the problem, even if they do not understand the issue itself. As you survey potential customers, common themes will begin to develop about how the problem’s solutions are viewed. 3. Quickly bring a product to market that clearly addresses those success criteria effectively. Being first to market is not enough. First to market acceptance is the goal.

2. The best way to create a new market is to look for a customer’s problem, not a product. Markets start with a need. Combining that need with a product is how you create a new market.

2.1. Common Denominators of New Market Success

2.1.1. Customer-driven markets work better than vendor-driven markets.

2.1.2. Take the two lower risk paths to a new market: Develop a new product for a known market or take a known product into a new market.

2.1.3. Be willing to ignore opportunities to avoid diluting efforts.

2.1.4. Start with cross-functional teams and leadership

2.2. Balancing Resources and Opportunities

2.2.1. For new markets, creativity and imagination are more important.

2.2.2. In order to create a new market you need three key resources to invest in opportunities Money People Time Time is the most important resource and greatest expense for creating new markets, and it should be measured by time to market acceptance. The sooner you reach market acceptance, the sooner you can reach market dominance, and the sooner you can move to the next new market.

2.3. Choosing the Right Problem

2.3.1. You have three options to finding the right problem: 1. Anticipate future problems. 2. Create problems. 3. Ask customers about problems.

3. What New Markets Are Available to You?

3.1. Path 1. A new product to an unknown customer set.

3.1.1. The combination of new products and new customers is very exciting because it allows the most creativity. But the challenge of defining customers who have never existed for a product that has never existed makes this the hardest and riskiest strategy.

3.2. Path 2. A new product to a known customer set.

3.2.1. Working with unknown products but known customers is a much easier strategy because you can go directly to the customers and ask which problems matter to them.

3.3. Path 4. A known product to an unknown customer set.

3.3.1. Unknown customers and known products is another way to reduce risk. It is not easier than creating a new product for known customers, but this route to building a new market is more likely to succeed.

3.4. Path 3. A known product to a known customer set.

3.4.1. Managers believe creating a market with known customers and known products is an obvious strategy. Unfortunately this minimizes the risks too much and often ends in a line extension instead of a new market.

4. Building and Dominating Markets Through Involvement

4.1. After creating a market, your company will not necessarily dominate it. Example: Perrier, the pioneer of bottled water, does not dominate that market.

4.2. How To Dominate a Market?

4.2.1. Personal Involvement One way to avoid these pitfalls is to provide ways for customers to become personally involved in the product, making them active partners in building the market and allowing you to reduce risk.

4.2.2. Start at the Design Phase Building involvement into products should happen when you start designing products for new markets. Begin by accepting a wider definition of the word product that includes everything that customers experience in their relationship with you and your business, including advertising, handling complaints, and offering support.

5. The Role of Information Technology

5.1. Information technology (IT) does not build markets, but it can play a role in creating and dominating new markets by helping to solve the customer’s problem.

5.2. Other Ways Technology Can Help In addition to solving customer problems, technology can help support your market-creating efforts in other ways.

6. What’s Next?

6.1. Whether your company is growing rapidly or dealing with belt-tightening and disruption, it is still able to create and dominate new markets. Changes in demographics, growth, recession and dislocation can all increase your chances for success.

6.1.1. Demographics. Always assume that your client base is shifting, especially as the demographics of the market at large are shifting.

6.1.2. Growth. Many people are overwhelmed by the perception that everyone is creating new markets in a growth period and that there are none left.

6.1.3. Recession. Recessions provide opportunity, because there is so much pain. Problems that were not critical during the good times are suddenly more important. Resolving pain is a good place to start creating and dominating new markets.

6.1.4. Dislocation. Dislocation, disruption and consolidation also provide opportunities for new markets. As businesses grow and move, they have new needs. As old technologies are replaced by new ones — though the average level of service stays the same — new opportunities can open up during the transition.

7. The Bottom Line: Lead With Problems