What Is a Market, Really?
The goal of marketing is to find and build relationships with customers, and the function of marketing sits at the interface between customers and the company that needs customers to build financial value.
In most markets, competitors are trying to build relationships with those same customers. As a result, in the process of going to market and positioning a product or service with the intent of appealing to prospects and converting them into loyal customers, marketers need to think about not only customers but also the company and existing and potential competitors.
Positioning: Product-Market Fit (But What Is a Market?)
One of the main responsibilities of marketers is positioning a product by finding a “fit” between the market and the product/service they are selling.
Part of the problem that marketers face in confirming the product/market fit is inherent in the “market” concept: A market is not a tangible thing, it’s a social construct (you cannot see, feel, hear, or touch a market). As a result, some people in marketing have a tendency to focus on a product or service they can see—and think of those products and services as “the market.”
When viewed that way, the market exists at a narrow category level or an industry level, leading marketers to immediately focus on some vague notion of a “target market” and then go directly to personas, audience types, SIC codes, verticals, messaging, and stories—without ever stopping to think about what a market really is.
That approach can further lead to the well-known problem of marketing myopia. The classic example of that is the buggy-whip industry and the way it was blindsided by the emergence of the automobile.
Benefits vs. Features, Attributes, Characteristics (What Does the Market Want?)
Moreover, once marketers limit their focus to products and services, they go on to focus on features, attributes, and characteristics.
It’s perfectly natural to think that customers buy products and think about their features and characteristics. People do think about such things. But is that really why they buy something? As Theodore Levitt, the noted management and marketing legend said, “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole!”
In other words, people ultimately want the benefits of a product or service. And by “people” I’m not referring just to individual consumers, I’m referring to companies and divisions of companies, which also want benefits.
If you’re not sure that’s the case, look around the room you’re in right now, find something you own and like, and ask yourself, “Why did I buy that?’ Sure, it might have some appealing feature, but why did you want that feature? By repeatedly asking yourself “why?” you will understand Theodore Levitt’s central message.
When marketers focus on features, attributes, and characteristics, they are focusing their attention inward, on the company and its products, and away from customers. Whereas when they focus on benefits, they are focusing their attention outward—on what customers are really buying.
In fact, you can think of a market as “a group of customers who want or need varying types of benefits they derive from product/services that provides those benefits.”
The Benefits of Focusing on Benefits (What’s in It for Marketers?)
There are other reasons to focus on benefits:
- First, you start by being obsessed with what customers really want. We all talk about being “customer focused,” and this how you do it.
- Second, you don’t add features that customers don’t want and won’t pay for.
- Finally, you avoid being blindsided by competitors and substitute products.
Think about the taxi industry. Companies were happy to focus on taxis, territory, and other traditional facets of the industry. But along came Uber and Lyft, and they provided more benefits to customers. Uber and Lyft didn’t create new benefits… they simply offered benefits people already wanted.
Now, that doesn’t mean features, attributes, and characteristics aren’t important. They are. It’s those aspects of products that ultimately deliver the benefits that customers want. But marketers should focus first on customer benefits… and only later on the critical product aspects necessary to providing those benefits.
Marketers are often asked to focus attention on “vertical marketing,” certain-size companies, or other readily identifiable characteristic. You can still focus your attention on those characteristics, but you think of them as “descriptors” of a segment—not as a segment itself.
A Unique and Defensible Position (Where Do You Fit in the Market?)
If you want to occupy a unique and defensible position, instead of starting from the company, its products, or some industry, start with the people who are going to be considering the purchase of your product. They reside out there—in the “market”! More precisely, they are the market.
So, how do you ensure you occupy a clear, unique, and defensible position in the market? Contact us at MarketingProfs, and we can help.
More Resources on Product Positioning and Market Fit
Positioning in Crowded Markets: How to Make Any Product Obviously Awesome
The Key to Successful Positioning: ‘3Cs’ Research
26 Universal Questions for Brand Positioning (And Creating Your Brand Story)