Hello All. I’m quite new in the Product Manger role, and struggling with some aspect of the job:
How to perform a market analysis ?
I’m trying to find the verticals, meaning the market where i would focus for my product. However, it’s really hard as i have the feeling that every industry could be impacted by my product.
As an example, if your product was “Internet” and i asked you : “Which market will you focus?”. How would you answer this question ? When internet came out, it impacted all industries.
I’ve tried to look at what has been done by my colleagues. But it doesn’t make sense to me. For instance I’ve seen market analysis between “Retail, Wholesale, transport”. But :
Retail is opposed to Wholesale. It’s not industries. It’s distribution strategy.
Transport is an industry.
I’ve also seen market analysis done by usecases. For instance (still with Internet) :
- Vertical 1 : VOD platform
- Vertical 2 : Social network
- Vertical 3 : e-commerce website
But once again, it’s usage, and not market. So I’m not convinced it’s the right angle.
I’ll be glad to have your mind on this, and if you encountered such situation !
Even though the product might seem like could be utilized by every and any industry, the truth is it’s more efficient to focus on one specific industry - preferably where your product brings most added
value to the table.
So you can perform an initial market analysis on a broader spectrum of industries, but this step should enable you to narrow the group to few, best case one.
It’s quite enigmatic to me what’s the app and therefore hard to think of something more concrete.
@Nathan, For some product, I would have 100% agreed. On my specific product, I find it hard to see (maybe because I’ve lost perspective).
It’s a product around Asset Tokenization. Basically you can create reward program in the form of digital currency, you can create closed ecosystem (think of lunch voucher for instance), or even stablecoin.
If I take reward program, I could imagine working with transport industry (train station for instance), with malls, with restaurants, with football club, even with government who want to create local currency.
The technology behind is just the same.
@Yuri, Are you able to determine where the product would effectively provide most value? Is there any competition on any of them?
Trying to appeal to anyone is usually causing the value proposition to be unclear for outside world.
Maybe you should rethink this as focusing on the partner who’s most interested to work with you. If the product could be equally good for both restaurants and governments, poke around a few of each, make your best pitch to each, and tailor the solution to the one that says “yes”.
But more of a pragmatic approach than theoretical and TAM-based.
If you can’t find a single customer who, after an in-person hand-tailored pitch to their business, will sign up for your product it’s a good clue you’re building the wrong product. So either way — whether you land a customer or don’t — you’ve learned something.
I’d recommend reading the book Absolutely Awesome it is all about properly positioning a product in the right market.
I figured you mean “Obviously Awesome” ?
Thanks for the idea ! I’ll order it.
Yes, working from memory. Good luck.
I think your best bet would be to segment the market around different firms that would find your product the most valuable. Trying to go after everyone is a sure fire way to make your product appeal to no one. So my advice would be to find the small but specific set of users/customers/business that would value your product the most and where there is a natural product fit to the business.
When trying to look at it from such a birds eye view such as transportation or retail then you’re casting you net too wide. Any industry is comprised of various sized businesses doing activities that are creating and delivering value in some way shape or form. Approaching the market by focusing on where there’s a natural fit for your product and the value it offers to the specific business or users.
The internet impacted all industries but it began as a research/defense network and spread from there.
Regardless of whether you are looking to analyze opportunities between industries / geographies / sub-sectors / user groups, the fundamental question is the same:
Where can the product deliver the most value?
This can be broken down into a few factors:
- Size of the target audience. Naturally, this rabbit hole should consider how much of the market we can capture, at what cost, and how much it would cost to retain it.
- Level of competition. Think number of competitors, replacement products, current status quo.
- Willingness to pay. Uber does not add the same value in a village in Alaska as it does in nyc, and therefore someone in the village isn’t going to pay the same as someone in Greenwich village. If you think they would, you are ignoring stakeholders, use cases, and replacement options.
- Cost of delivery. It would make absolutely no business sense to provide an azure cloud offering with guaranteed local storage in Iceland (Or maybe it does. I don’t know. But you get the point)
- Current behavior. Your product is an asset tokenization platform. Why would a specific industry, or customer use it? Instead of say, coupon codes. Or whatever form their current loyalty program takes.
Measure ( size of the audience X urgency of need X willingness to pay) , and rank across your industries. And you have your answer.
I work on a similar product that serves multiple industries and i looked at the current customer base, looking at the industry they were a part of, their average deal size, how long have they been customers and how many customers purchased. I used that as a benchmark for industries we were able to penetrate already. I learned what problem we were solving them by working with our sales team to understand more. Then I took a look a large deal sizes with small industry representation to see if that’s a market opportunity.
Also, get a list of who you think might be competitors, and log some information about them. Industries they are targeting, price, their marketed differentiators. You can also do a close lost analysis on deals lost and see if competition comes up there if sales provides that detail.
My CRM was especially rich in this content so get access if you don’t already have it.