One common oversight of fledgling entrepreneurs is lack of early attention to marketing, by failing to conduct research on your marketplace before you open the doors.
However, many companies get this step right and still fail. They forget to take into account the different segments of buyers in any marketplace, and the fact that each must be treated differently. This is particularly true if you have a new and innovative product (or service), and it's even more true if you have a technology-driven product.
Suppose you have defined your target market and know its exact size in terms of numbers of potential buyers. This figure represents 100 percent of your market. Extensive consumer research by the American Management Association and others has identified five general categories of buyers that exist within every market for new products. Each group's reasons for buying are different, so you must modify your selling strategy appropriately for each group.
1. Innovators
The smallest group of early buyers are the innovators. They read journals and magazines extensively, are more frequently exposed to innovative ideas, and are the "techies" of the marketplace, being willing to experiment with anything new. They have a high degree of self-confidence and are turned on by new widgets representing the latest technology. If your product turns them on, they are sold. If they are resellers, they can readily develop their own program to sell to their own customers. They may influence other buyers in their same group, but their purchases do not lead to a widespread trend. They are also the smallest group of potential buyers, representing only 2 percent of your market.
2. Adopters
The next group is the early adopters. This group represents true opinion leaders who set examples by their decisions. They are respected change agents and are willing to try a new product if it will significantly improve their lifestyle or allow a quantum improvement for their business. They need to understand the benefits and will seek out references from other satisfied users before making a purchase. They typically represent about 15 percent of your market.
3. Early majority
The next group is the early majority. This group is slower to try new products, entering into the market only after their peers have actively embraced the product. They are far more pragmatic and less technology-driven than the previous groups. They are looking for modest productivity improvement, and they care about the longevity and reputation of the company providing the product. They usually represent 39 percent of the market.
4. Late majority
Next is the late majority. This group makes its purchases late in the cycle, often after the innovators and early adapters have moved on to new product forms. They wait until prices fall and the product has become the universally accepted solution. They are most concerned with low cost and customer support, and they rely on the mass media for purchasing information. They represent another 39 percent of the market.
5. Excessive traditionalists
Finally come the laggards, who are excessive traditionalists. They wait until price has bottomed out, competition is intense, and the product has become an absolute need. They tend to purchase products the other groups would consider obsolete. If they are in the approval cycle for new products in a business, they will try to block the purchase of products the other groups might buy. Luckily, they represent only 5 percent of any market.
Accordingly, companies with new products must adapt their selling strategies according to the groups they are trying to reach. The innovators for the easy sale. Next are the early adopters with a benefits-oriented approach, followed by the early majority seeking a pragmatic, zero-risk solution, and finally the late majority seeking low-cost and strong support after the sale. If you plan to continually operate a company with leading-edge products, the laggards are probably not worth the effort of a specific marketing campaign.
Vary your selling strategies accordingly, and you are on the way to achieving continued growth.
Hope this helps!
