However, a crowded market, if anything, shows that demand – and a market – exists. Facebook was not the first social media site, and Google was not the first search engine. The key isn’t finding an empty field – but narrowing your product or the service you provide to a well-defined and niche customer, and meeting their needs better than anyone else.
This idea doesn’t make the situation any less daunting, however. A crowded market inherently involves a competitive climate – here are some ways to make sure you have the edge.
1. Identify a tranche of potential customers whose needs aren’t being met – and what these needs are
If you’re a latecomer to a popular and crammed industry – look for the slice that’s not getting enough attention. When Sian Sutherland and her business partner Cathy Mellor looked at the cosmetic market, they could easily have walked away. From both of their experiences of pregnancy, and having looked for safe and effective products to use on their skin, they realised that there wasn’t much on offer.
They developed Mio – a brand specifically designed to address the emotional and functional needs of pregnant women and new mothers. Some valuable marketing lessons can be learned from what they achieved – mainly that they based their product on understanding customer needs.
2. Can this group be classified as a customer segment?
The next thing to consider – after a starting point of customer needs – is whether or not a particular needs-based customer group can, in marketing speak, be classed as a ‘customer segment’.
Failure to define real customer segments is very common. Good marketing strategies target needs-based customer segments, while weaker strategies look at broad descriptor groups such as age, sex and geography. Within these broad groups are many subgroups, some of whom are likely to buy what you offer.
For the segment to be viable you should ask it it definable, is the need consistent across a significant number of customers and are they profitable to target? If the answer to these questions is ‘yes’ – you may have yourself a well-carved customer segment, based on needs which may not have been met in a market which from the outset appears ‘crowded’.
Look at the example of Facebook. Social media networks had existed for years – the creators of Facebook focused on transplanting whole college networks into Facebook, ensuring that their early users would always find someone they know. Their starting point was identifying a need-based group – the college student, looking to connect with others. Through identifying this niche customer, they managed to redefine the function of social media itself.
3. To get this far, you need true market insight
In order to get this far, one needs market insight. True market insights are hard to come by though, in that they are not simply about market data but rather about market observations that are uniquely valuable to those that have them. Sometimes it takes extensive and indeed expensive market research to uncover these needs but in the case of Mio, Sian and Cathy were part of the potential target customer group and they were actively looking for great products and couldn’t find them.
It doesn’t matter where great insights come from, from the founders, the sales team, primary or secondary market research or somewhere else. What matters is knowing what to look for, what information is valuable and then tapping in to the right channels to gain real insight.
4. Look the at competitive landscape – but don’t let this dampen your passion
Of course, it’s important to pay attention to what your competitors are doing. Or, perhaps more importantly, what they’re not doing. But start with an understanding of customer needs and then innovate to meet them, rather than with an analysis of the competition. In the case of working in a crowded market, starting from an examination of the competition is likely to dampen spirits and passion.
In fact, if you start from looking at unmet customer needs, you will be looking at what the competition are failing to do – far more important in carving out a niche, than simply focusing on everything that they are doing already.
No matter how crowded a market may appear – there will be a group whose needs aren’t being met. All you need to do is identify the group, figure out what their needs are, why they aren’t currently being met, and how you can meet them.
By David Allmond Co Founder of Peppered Moth Marketing
Image: Strawberries via Shutterstock
