Create Your Market Dominating Position, by JOHN MACKENZIE
Most small businesses are established in response to a perceived market demand for a product or service.
What happens when that demand slows or stops? What happens when your competitor comes up with a “new and improved” version of your product? How do you keep your offering fresh while growing and maintaining your client base?
The answer: innovate your business and offer extraordinary value by creating a “market dominating position”.
A “market dominating position” is any customer perceived value-added benefit, or a combination of benefits, that differentiates you from your competitors and does so in a strong enough manner that it makes your business the logical choice in the minds of your prospects and customers.
Every choice made when buying a product or a service represents a point of differentiation between one company and their competitors. Why did Dominos become a billion dollar behemoth in an overcrowded market in just a few years? They offered the exact same pizza as all of their competitors! They created a market dominating position, which was fast hot pizza, targeted specifically for hungry college kids.
What, if anything, makes your business different from your competitors as perceived by your targeted prospects and customers? For the vast majority of businesses that answer is price.
Nike offers a wide range of shoe, apparel and equipment products, all of which are currently best sellers globally yet Target sells an excellent imitation for around $40. Nike outsells them by more than 10 to 1. Starbucks typical clients spend between $3.50 and $4.50 on every visit. That’s around 2 to 3 times higher than some of their competition. Obviously low price isn’t the driving force here. These top selling companies have staked out a specific and targeted market dominating position.
Nike’s position revolves around being the best athlete, being hip and in style. Starbucks creates the perception that their products are the secret to a better lifestyle.
The key is to create added value in everything you do. Prospects and customers don’t buy based on price, they buy based on the value they receive for the price they pay. Creating added value is a strategy that can take the form of a product or service that’s added to your original offering for free or as part of a discounted package
Everyone can add value to their business. The key to adding value is determining what your customers and target market perceive as valuable. Understand their needs, wants, troubles and inconveniences. Revisit the value you offer. , or your customers will be drawn to your competitor who consistently innovate their business so they offer exceptional value that you don’t. Adding value will also add to your profits. This works for product and service-based businesses. If you’re service-based like hairstyling, try treating your customers by offering them a latte while they wait, or complimentary shampoo samples or a free conditioning treatment with every sixth visit. If you sell a product, consider offering convenience services like free shipping or delivery and set up to make the customer’s experience a seamless one.
Here is a 5 Step Differentiation Process.
Step #1… Determine your strategic position in the market
What specific niche market or segment of the marketplace should your business focus on? Determining this involves combining the skills your business has with the unmet needs of your targeted prospects and then designing your product or service to fulfill those needs.
Step #2… Determine your primary market dominating position
This is the most dominating advantage that separates you from your competitors. Domino’s claimed it could deliver its pizza in 30 minutes or less, or they would give it to you for FREE! This was the primary advantage that met the needs of their newly defined market position – hungry college kids that wanted food fast.
Step #3… Determine your supporting business model
How will you specifically deliver what your strategic position and primary market dominating position promises? What changes, if any do you need to consider making to your business to ensure you deliver consistently on your position and your promise? Domino’s built low cost, plain vanilla stores strategically located near college campuses and hired additional delivery staff and drivers on a stand-by basis.
Step #4… Determine your secondary market dominating position
What additional competitive advantages does your business offer that your customers will perceive as being different from your competition? Domino’s secondary benefits might include special pricing (10% Off on Tuesdays), assorted sizes, a much broader selection of toppings or additional menu items.
Step #5… Create your market dominating position statement or elevator pitch
This is a statement you create by combining steps 1 – 4. This helps you to state unequivocally what differentiates you from your competitors to your target market
An expanded version of this might say: “Domino’s provides busy customers with fresh hot pizza and other food items within 30 minutes or less. Our assorted pizza offerings combined with our value pricing makes Domino’s affordable to everyone”.
Don’t just survive, thrive. What makes you different?
John is a featured S4B Mentor and Speaker – Contact 403-348-0102 if interested in booking John