Marketing Strategy Sample
There are three key components for developing a sound market penetration strategy: market sizing, market segmentation and embracing the technology adoption curve.
The ability to accurately size the market opportunity will provide the necessary focus so that all go-to-market resources are aligned for maximum impact.
Market size is a measurement of both the total and potential volume of a given market. For now, think of market size in terms of a pyramid that includes three layers: Total Market, Served Market, and Target Market.
Total Market – the total market attempts to quantify how big the total universe is for the specific product or service in question. This measure of the market is very broad and includes the total spectrum of the technology adoption curve. Note that the technology adoption curve represents all segments of a market including innovators, early adopters, early majority, late majority, and laggards.
Served Market – the served market is a subset of the target market and contains filters based on the reach of an organization’s distribution channel.
Target Market – the target market reduces the served market down to those that are most likely to buy based on the value proposition, a specific business problem and demographic, or social and transactional considerations.
The following are examples of information sources that can be leveraged to determine market size:
- Government data
- Trade association data
- Financial services companies
- Financial data from major players in the market
- Customer surveys
- Predictive modeling
At the heart of market sizing is market segmentation. Market segmentation is a marketing strategy that divides a broad target market into homogeneous subsets that have, or are perceived to have, common needs, interests, and priorities. Once the broad market is properly divided, one can then design and implement strategies to target those subsets. Market segmentation strategies are generally used to identify and further define the target customers. They also provide supporting data for marketing plan elements (such as positioning) to achieve certain marketing plan objectives. Businesses may develop either succinct product differentiation strategies or undifferentiated approaches which would involve specific products or product lines depending on the actual demand and attributes of the target segment.
Technology Adoption Curve
Established in the 1950’s at Iowa State University, the technology adoption lifecycle model describes the adoption or acceptance of a new product. The technology adoption lifecycle is illustrated as a normal distribution or bell curve comprised of five segments: innovators, early adopters, early majority, late majority, and laggards.
Specifically, the segments are defined as:
- Innovators –innovators are the first individuals to adopt a new product or service. Innovators are willing to take risks even though they know that they may ultimately fail as they can absorb the financial loss. Innovators represent 2.5% of the market.
- Early Adopters –these adopters are often referred to as thought leaders because they have a good deal of influence on other buyers in the market. Early adopters represent 13% of the market.
- Early Majority – these individuals adopt an innovation after there has been some proof that the product or service works — and this can take a varying degree of time. The early majority represents 34% of the market
- Late Majority – the late majority adopts an innovation once the scale has been tipped—meaning the average person is now a buyer. These buyers are highly skeptical, risk averse and afraid of financial loss. The late majority represents 34% of the market.
- Laggards – this segment of the market is the last to adopt a new product or service. Laggards do not follow the trends and are not swayed by thought leaders. They are very much creatures of habit and do not like to change things, even when something is broken. Laggards represent 6% of the market.
Market sizing, market segmentation and embracing the technology adoption curve are precursors to establishing a sound market penetration strategy.
Download the How to Size the Market Opportunity Template to estimate your market and focus your valuable go-to-market resources.