What is Positioning? | Why to use Marketing | when to use Marketing

All management jobs have the main goal of avoid risks, but one: Marketing.

Dear Fellow Innovator,

This night I was thinking why a business should make any marketing activity at all.

You can sell your stuff even if you don’t do marketing. This is how it has always worked. You do a good job, then you get a referral, then the news spread out by word of mouth…and your business flourish.

With Marketing you add an extra layer of complexity to your business. And you must have some very good reason to adopt it.

The reason is: economy of scale.

If you get enough volumes you can almost always reduce your price in such a way to satisfy almost all possible power of spending in your target market.

This in turn has few other advantages:

· you protect your market from competition

· You expand your earnings

And the only way to get a fast enough volume rump-up, before your market get targeted by a competitor, is to jump ahead of word of mouth’s wave propagation and build a process that pulls customers in your direction: a marketing process.

All of the above works in the lucky situation in which you open a market, bringing a solution for a poorly solved problem.

But what if you are targeting a market where a player is already established?

You can take advantage of two situations:

1) A market Leader has a need of weak competitors, in order to justify his Price

2) Leaders have always someone who dislikes them.

The good news is that in the first case, you do not need any Marketing.

The market Leader is always happy to send you difficult customers ( generally those who require a degree of customization - a behavior that has a low degree of compatibility with scale economy).

He gets rid of inefficiency drivers in his supply chain and at the same time boosts Price in comparison with more sophisticated solutions.

So if you are happy to live in a niche, all the marketing you need is a façade made of sales communication tools ranging from brochures to simple websites and a desk at major industry’s expos.

There are even players that, conscious of their weakness, invite major league players in their newly discovered playfield, so that they can play the “doomed” competitor role and make a decent living.

Exploiting the second case is a bit more ambitious.

Here the game is about shelving a chunk of the market away from the Leader.

Ok. But which chunk?

Because if you get into the problematic “customize-me” segment, you just fall into the previous case, playing the Doomed Competitor game.

· The only way is to identify that part of the market that loves standard products but hates the Leader.

Here Marketing is essential. Not only you should identify the “haters” but you have to size them. Because if they are not sufficient to reward your market entry efforts, better you stop wasting money.

Then you have to give them a reason to sing your psalms against the ones of the “lovers”: those who identify themselves with the Leader.

You can immediately see that all this is about preparing for a war, and not: setting for peaceful nap.

Marketing, in other words, is about building the weapons to dare to risk a war against the market leader and hope to gain a vast market territory.

To recap: Marketing is about Ambition.

· If you are ambitious and want to open a new Market: you need Marketing

· If you are ambitious and want to steal an existing market you need Marketing

· If you are chicken-hearted:

Play the Dummy-Competitor role, if you can.

In case you need a hand in setting up for a battlefield,

Give me a call: +44 7491 164 097

Cordialmente

Flavio

PS: this is the essence of Positioning. If you cannot figure out this, you cannot succeed in marketing.

Marketing is a Risk Taking activity

Little nightly thoughts

by Business Exploration^®

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