Creating New Markets
At the heart of any business is the process of creating products and services that satisfy new customers needs.
Market creation is the process of identifying and fullfilling new customer needs. The process begins with thinking through answers to a series of product and customer related questions often called the marketing mix
The Marketing Mix
- Market selection
- Who are the customers or subset (segment) of customers you are targeting?
- Product( or service) planning
- What need has been identified
- What product is the company going to design to fulfill this?
- What are the product features uniquely targeting this market?
- What is the competitive advantage of the product?
- How will the product be packaged?
- Pricing is a quantitative expression of the value of the product to the customer.
- Pricing should be designed like a feature consistent with the use of the product.
- What will you charge?
- How will the customer pay and when?
- See also the discussion of the Price/Features matrix
- Which channel, Internet, direct, wholesale or retail best delivers the information, product, support and benefits to the selected market?
- Positioning: What is the message that states the purpose and benefits of the product in the market and how it competes?
- How will people be informed about your product, showing them how it can be useful, and persuading them to buy it?
- What role should branding play?
- Support and Service
- How does the customer get help if needed to make the product work and replacing or repairing it when it’s broken?
Decision Making Unit and the Decision Making Process
The actual selling process breaks down into two components called the decision making unit (DMU) and the decision making process (DMP).
The Decision Making Unit (DMU)
The DMU) consists of all of the people who will play a role in the decision to purchase a product. The marketing mix program must address the needs of each of these individuals and find a way to communicate the marketing message to each of them. These people are typically identified as:
- Initiator – Initiators recognize the value of solving a particular issue so they initiate a search for a product
- Gatekeeper- – Gatekeepers act as problem or product experts and control information and access to other members of the DMU
- Buyer – the person who actually issues the check. (For example the purchasing agent, or the individual consumer)
- Decider – the person or group that actually says this is the product we want,e.g. the VP Engineering
- Influencer – whoever helps the Decider, i.e. the press, analysts, peers, evaluation groups
- User – the individual or group who actually uses the product and derives benefit from it
The Decision Making Process (DMP)
The people included in the decision making unit (DMU) interact to make the purchasing decision.
The DMP is a description of this interaction. By using this structure, a Marketing Manager can best understand the who, what, how, and when a customer buys. This understanding then drives the selection of all Marketing Mix elements like Channel of distribution.
- A company has decided to pick a Microprocessor Architecture Standard for an embedded system. (Arm, MIPS, or Atom)
- The Decision Making Unit (DMU)
- The engineering VP will make the decision.
- The Microprocessor Architecture Standard will be used by all hardware and software engineers within the company
- An evaluation team, with representation from both HW and SW is formed to make the recommendation.
- A requirements list is generated including:
- Reference designs
- Future product road map
- Supplier reputation
- Benchmark tests are planned.
- Recent magazine articles are also reviewed.
- The evaluation team hires a consultant to research alternatives. The consultant has great influence due to his strong technical background
- The purchasing manager is asked to negotiate the best price and terms of payment.
- The Decision Making Process (DMP)
The salesperson for the winning Microprocessor company was on top of and influenced every person at every stage of the decision making process.
- After a few months, the evaluation, reports, benchmarks, and vendor evaluation are complete. The team holds multiple meetings and makes a recommendation. The VP R&D decides to accept it and go ahead. Purchasing negotiates the contract