Assessing the marketing environment for your business
Hey, it’s Rob Taylor of Rob Taylor Official. I just wanted to check in and discuss with you today about the importance of assessing your environment to know the context of what you’re marketing and who you’re marketing to. I’ve seen on many, many occasions that people charge forward and really just dive in with an idea that they think is useful, and it might be to an extent, it most likely is to someone, somewhere. But there’s been little to no actual evaluation of the market that they want that product to launch. I wanted to just give you a few tips and tricks as to how best measure this and evaluate where you are now compared to the relativity and suitability of the market you want to enter.
It’s important as well I think just to raise the importance of why this is relevant to you if you are a business owner, an entrepreneur, a product manager, decision maker within your business, you really need to know and understand why you’re positioning your product, how your are and where you are. Now, a lot of people do commonly tend to skirt over this and really skip over but I can’t exaggerate the importance of this. It really is something you need to know, you need to understand well. You can have the best product in the world but if you’re selling it out of context, or selling it in the wrong place, it’s gonna fail and the people you want to know about the product won’t know about the product. Or the people that do know about the product won’t really give a damn.
Let’s just chat briefly about two different types of assessment you can do to take that picture, that snapshot, of your business to help you get a better picture of where you want to go. Basically, I alluded to taking a snapshot of your business and that’s what it is. I don’t know if there are any photography aficionados out there but I think from my limited understanding of photography it’s like increasing the aperture of your business. It’s widening the lens from which you’re looking. If you look through a pinhole you’re only going to see a very limited amount, where as if you look through a wide lens or a big zoom, you’re going to see more and you’re going to see a bigger, wider picture. A pinhole might take a pretty picture but it’s not going to see the clouds to the right of the picture which may threaten your picture within an hour. It’s quite a loose analogy but it’s one that you could probably focus in your mind to get an idea of where I’m going with it. The wider and more broad you can take your view of your product, it’s the better for everyone concerned.
Now, I mentioned about different elements of assessing the market and that’s broken down really into two. The external factors, that being defined as something which you can’t have influence on or can’t affect but it can influence and affect you. Things like the weather if you’re an ice cream salesman or a gardener, for example, in the winter. Or a boiler installer during the summer. Demand drops significantly on the weather but you can’t control or change the weather. But you have to appreciate, adapt, understand and be fluid to its influence on you. Now, these things are obviously vital to understanding where you are and where you position your product in your market but it’s more the internal things that you can affect and change that you really want to be worried about. There’s no point in worrying about the external forces on a business but you have to have and understanding of them.
Where as the internal forces upon your business you really need to have fine-tuned understanding and know what you can affect, and what you can change and influence to create a better position within your market for your product with your business and really create a competitive advantage. Now, the external forces can be broken down into a model which I teach at my events. I know I’ve widely taught and [inaudible 00:04:48] picked up through the charts and instituted a marketing through my studies and I find it very relevant to understand and apply to my product, to my marketing plans moving forward.
The acronym that I use, and if you want to take a pen and write this down, is PESTEL. That’s P-E-S-T-E-L. And I won’t go into too much detail about what that means now, it’s one part of a blog post or another event somewhere down the line, but it’s a fantastic tool for just assessing and measuring the influences that impact your industry and your product, what you don’t have direct control over. It takes into account political, economical factors and sociological factors, technological, environmental and legal factors that apply to your business. Now, another external model to use, along which is fantastic and also strays slightly into the internal model so you might see some people use this internally but I tend to just stick to it external, and that is the five forces model.
Made famous by Michael Porter, a classic business strategist and marketer it’s basically the five forces of significant influence that apply directly on to your product. No matter what your product is these forces will affect. To give you an idea, the threat of substitutes addresses the indirect competition to your product. So what else could do to get a similar result but not use your product? This is indirect products charting the same market to you but people do instead. For example, you might go to the cinema instead of going swimming. Or you might go to a live music event rather than a comedy event. All these are substitute products to each other and need to be addressed within your industry.
The threat of new entrants. These threats are, as it sounds, new entrants to your market. What could someone do? Is it easy for someone to enter your market? The power of technology on industry and business shows really how easy it is to setup an online concern and an online outlet if you use things like Alibaba or other dropshipping solutions. You can be selling phone cases within a matter of hours, drop shipped direct to consumers, so it’s heavily competitive, meaning there are limited, indeed reducing, barriers to entry. The Threat of new entrants in this instance is very high which will probably drive your price down, your margins down and could ultimately become a non-viable business. Think about that for new entrants – what barriers to entry are there in your industry? To your product?
The competitive environment is another one of the five forces. That is something that you really need to understand as it’s your competitive environment. It’s the market in which you are active. An example here for the bar or live music industry would be to ask, what are all the other bars doing? What’s the market size? Who are the people going out? What are the key drivers and influencers on going out? Is the market growing or shrinking? All these things should be readily available in secondary format so you don’t have to go out and buy or resource primary research. Take some time to assess your industry. Really dig down into your marketplace and consider the key drivers that influence the decision-making process. Dig deep to find the market size, you will undoubtedly find something exciting!
They’re just three of the elements of the five forces but really those two tools I gave you there really are the key drivers and key assets that you need to assess your external environment when planning and moving forward with your business. Now, the internal side of things, there are various aspects so please refer to future blogs and this link here which shows you to several tools and frameworks to help you identify your USP, your unique selling proposition and help to identify your competitive advantage. The main purpose of this exercise here, the taking the picture, the snapshot, of your business, and your industry and your market is so you can really see and paint a picture, or see a picture of where you are and where you’re standing today.
You cannot decide where to go if you do not know where you are currently standing.
If you’re planning on launching a new product into a market, you need to know what that market’s doing at this present time. With these tools that’s exactly what you can do. It goes some way to developing the SWOT Analysis which is something I’ll talk about in the future and is also available in the resources. But the importance of assessing your environment can’t be stressed enough and it’s something that every business should have to do. And I just wanted to touch base and run through a couple of the elements. We go through much more detail and depth in the events, and courses and the marketing power hour, the lunchtime marketing event. We apply to your business these frameworks and
We go through much more detail and depth in the events, courses and the marketing power hour, the lunchtime marketing event. We apply to your business these frameworks and tools, delivering you immediate value and ideas to implement in to your business.
Ultimately, arming yourself and improving your toolkit, and filling your toolkit so you can appreciate your scenario in whatever position that you find yourself and you can pick out the right tool for that job. You wouldn’t put a nail in with a screwdriver and that’s what developing your marketing toolkit will help you understand.
Keep tuned, stay focused, and I’ll speak to you soon. Thank you very much. Take care.