Changing Markets

Start-up CEOs constantly talk about managing growth, but rarely about managing change (growth being only one type of change).

It happens a thousand times faster in technology markets.

Marketing must monitor markets, and identify changes early on (though the better approach is to keep reinventing the market yourself and driving your competitors nuts in the process). Here are a few things to watch, some of which you likely are not.

Competitors and partners

Competitors never sleep, and are trying to reinvent themselves, market expectations and the shape of the known universe. Monitoring what they do as well as what they say is important. What they do exposes areas of the market they think are of growing or shrinking importance, and this needs to be folded into your positioning planning. What they say reveals what they want the market to think about them, which may not meet reality.

Important is watching their true product trends and their executives’ forward thinking. When you see small, incremental moves in one direction that are aligned with CxO public thought leadership commentary, then you know your competitor’s strategic direction.

What partners do is as important. One of my first consulting jobs was with VA Linux, a company founded on building Linux compatible servers in an age where few servers were. But as hardware component partners improved their Linux compatibility and cross-sold their products, VA’s market began evaporating. If your strategic partners make a move, treat it as if they were a competitor and predict what their long game is.

Buyer demands

Buyers change. What satisfied their needs before will not in the future, mainly because their needs change. As of this writing, iPhone user needs have changed as they look over the shoulders of Samsung customers and thrill to larger phone screens.

The tricky part is identifying what are the needs customers themselves do not yet know. Needs can expand (give me a larger screen), contract (send me to digital detox) or change tracks entirely (sell me anything but Windows 8!).  In highly segmented markets they can do all of the above, simultaneously.

Social media will be a great tool for identifying changing needs, though with the glut of content and tools not yet sophisticated enough to discern trending variables well, humans will still need to be involved. Training everyone in an organization who touches customers to sniff for change is not technically impossible, but practically so. Traditional tools – surveys, interviews, focus groups, etc. – will still be the most valuable for monitoring needs change.

Saturation and commoditization

All markets eventually get saturated and all products eventually become commodities. When they do, your product and marketing plans should change (unless you are really good at milking extra pennies out of commodity products). Technology tends to avoid commoditization longer that other product categories by allowing product enhancements and extensions. But even the most complex technology can be commoditized (server operating systems come to mind, now that most of the planet runs on Linux).

The question is when does your organization pivot? HP is still the king of PCs, though their board of directors has tried to exit that market in the past due to shrinking margins. The choice comes down to what else is your organization capable of doing, and is it more profitable with longer term growth potential.

Watchful, not waiting

Watch for changes, but make them yourself. All markets change, and it is better to force change than to react to change.


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