Guest post from Luis Pedroza:
Don’t be complacent. Always challenge your assumptions, especially when entering a new market or consumer segment. History is filled with examples of successful brands that became too complacent and then obsolete. Underwood, Kodak, Walkman, Blackberry, Vertu, and Blockbuster are just some of the brands that now cease to be relevant.
It’s well accepted that you can extend the product lifecycle of a brand and return to growth through innovation. Innovation expands usage occasions and helps reach new users, but remember, humans like to take shortcuts. We all create heuristics for solving problems and systems for managing existing businesses. We love to drive on autopilot, but all these shortcuts form a lens through which we view our worlds.
The problem is, our world is continually evolving and changing, and when the environment changes, we need to take the time to reframe our perspectives to correctly identify new opportunities. We need to do this, especially when entering a new market.
Reframe your Perspective
I once worked for an American brand that believed it had a leading market share in Asia. Viewing the business through that lens, led to a specific strategy. When I helped the company realize that they were competing in a much broader category that included many other brands, their approach and plans changed accordingly. By merely viewing the business from a new perspective, the company was able to unlock double-digit growth for many years to follow.
Validate your Assumptions
Unfortunately, changing your paradigm can be difficult for some people. In general, people don’t like to change. So, I developed a list of questions I try to answer whenever I enter a new market. My goal is to gain a fresh perspective on the environment. First, I list out all the significant assumptions I am making that underpin how businesses operate. Then, I try to validate those assumptions to judge their accuracy.
1) The Target – Who are your target users, and what needs does your product solve for them? Do consumers in the new market have the same needs?
2) Market Size – How many target users are there in your new market, and what percentage of them will buy your brand? What is the potential size of the prize?
3) Competitive Environment – Who are your direct and indirect competitors? Are there barriers to entry? What attributes and benefits do they compete on?
4) Consumer Purchasing Power – Do your target consumers have enough money to purchase your product the way it is currently designed? Realistically, how often can they afford repeat purchases?
5) Pricing – Should you position your brand as a premium or everyday product? Is the price per use aligned to the average income level?
6) Demographics – Is the target population growing or in decline? Do factors like age or ethnicity play a role in shaping consumer needs?
7) Category Lifecycle — Is the category lifecycle at a different stage of development? If so, how will this affect communication and the appeal of your product’s benefits? 8) Value Chain – How will your product get distributed to the end-user? Who are the key stakeholders involved, and what are their expectations?
It’s all in your Mind
What I love about reframing your perspective is how inexpensive it is to implement. At least initially, you won’t have to invest in new assets or technology. You just have to force your mind to start thinking in a new way. Albert Einstein said it best, “The world as we have created it is a process of our thinking. It cannot be changed without changing our thinking.”
Luis Pedroza is a global brand builder and author of LEAN BRANDS: Catch Customers, Drive Growth & Stand Out In All Markets. He has held leadership positions with iconic global brands and has worked in many international markets. For more information visit www.luispedrozaauthor.com.