Market Type Hypotheses

Understanding the dynamics of the market you're entering is vital to the positioning and future trajectory of your offering. These hypotheses will help you determine where you stand relative to existing markets and what strategies to employ.

Entering an Existing Market

When bringing an offering into an established market, it's important to assess the competitive landscape and consumer expectations. This sets the scene for strategic planning and resource allocation.

1. Who are the competitors and who is driving the market?
2. What is the market share of each of the competitors?
3. What is the total marketing and sales dollars the market share leaders will be spending to compete with you?
4. Do you understand the cost of entry against incumbents?
5. What performance attributes have customers told you are important?
6. How do competitors define performance?
7. What percentage of this market do you want to capture in years one through three?
8. Do you want your company to embrace these standards, extend them, or replace them?

Resegmenting an Existing Market

Finding your niche in a broader, established market can open up new opportunities for growth. Here, either affordability or distinctive specializations can become your differentiators.

1. What existing markets are your customers coming from?
2. What are the unique characteristics of those customers?
3. What compelling needs of those customers are unmet by existing suppliers?
4. What compelling features of your offering will get customers of existing companies to abandon their current supplier?
5. Why couldn’t existing companies offer the same thing?
6. How long will it take you to educate potential customers and to grow a market of sufficient size?
7. What size is that?
8. How will you educate the market?
9. How will you create demand?
10. Given no customers exist for your market segment, what are realistic year one through three sales forecasts?

Entering A New Market

Launching a completely new offering means educating potential customers and creating demand from scratch. This is often a long-term play, requiring patience and significant investment.

1. What market will potential customers come from?
2. What compelling need will make customers use or purchase your offering?
3. What compelling feature will make them buy or adopt your offering?
4. How long will it take you to educate potential customers and to grow a market of sufficient size?
5. What size is that?
6. How will you educate the market?
7. How will you create demand?
8. Given no customers exist yet, what are realistic year one through three sales forecasts?
9. How much financing will it take to soldier on while you educate and grow the market?
10. What will stop a well-heeled competitor from taking the market from you once you’ve developed it?
11. Is it possible to define your offering as either re-segmenting a market or as entering an existing one?

As you develop your market type hypotheses, consider how your offering stands out and which strategic movements will ensure a meaningful entry into your chosen arena.