A big part of building a concrete business strategy is in deciding the market that your company is going after, which can be difficult as every market is unique and all of them have certain dynamics that are to be considered when taking them on.
Every business also has a different approach as to what they are going after and within that playing field there’s always opposition to be considered. As a business owner, you want to find space where you’re not in direct competition with that opposition.
This is why I’ll often recommend to my clients that they should always consider and keep fully aware of the market that they are aiming for to adopt their product or service, as it’s not always a clear-cut path.
“Where Do You Play And How Do You Win?”
As you’re going through the process of finding the right market to deliver to, your awareness shifts to dynamics such as size of market; the geography of that market; the LSM and earning potential that comes with those potential clients; and whether you’re targeting a large, mass audience or a very niche and particular audience.
Within every product or service, your market can often be divided into two categories that sit on either side of those dynamics mentioned. Bear in mind that there is always room for a middle-ground, but that’s the space that you want to avoid when picking a side.
I like to look at the two sides as the Rolls Royce and the Chappies sides of those industries; the Rolls Royce side refers to the most expensive, exclusive and niche markets, while the Chappies bubble-gum side refers to the cheaper, high-volume and open markets.
Essentially, your goal is to pick a side and work your product or service and customer relations into one of those sides, while keeping away from the middle.
It’s better to pick either the low-volume, high-margin route or to take the high-volume, low-margin route, as the markets tend to be split and function better in one of those two areas.
In South Africa, when you take a look at the retail and food industry, we have Woolworths that takes on the Rolls Royce model, with careful attention paid to high-quality import products that opt for a smaller target market that are willing to pay higher prices. They dominate that area of the market, with a greater experience to offer their customers and a more comfortable environment; which ends up being a bit more costly.
In comparison, you have the Shoprite brand that adopts the Chappies model, where there’s access to a much wider market, but with much lower pricing on their high-volume products which cater to people with lower incomes. The experience isn’t as great and less attention is paid to making the customer feel far more comfortable and at home, but the pricing is far cheaper and there are far more customers at the end of the day.
These two models work very well for the businesses in these spaces and when you find some companies that try to sit in the middle, like Pick ‘n Pay, there’s always a challenge to deal with as the bottom takes up most of the volume-based market, while the top takes the niche and exclusive market; while they struggle from the middle to cater to both ends, taking fire from both sides.
Pick A Side And Stick With It
When picking and deciding on your target market, be very deliberate as to whether you want to find and attract Rolls Royce (high-touch, boutique, exclusive; better experience and enjoyment) customers or Chappies bubble-gum (lower priced, high-volume, wide audience) customers.
You will do your business the world of good if you choose to focus on a particular market and ensure that you deliver the best possible product or service that you can. Don’t fall into the trap of chasing shiny pennies that distract you from picking one side.
Try to avoid the middle and keep away from attempting to make both sides of the spectrum happy, as it doesn’t always work out for your business in the best way. You’ll be left under a load of strain as you compete with both the cheaper and expensive model, rather than dealing with one competitive force by choosing one of either side.
Take the time to consider the pros and cons that each of those markets present you with, weigh it out and determine which area suits your product or service best.
Being a fence-sitter has never really worked out too well for anybody, ask Humpty Dumpty.
And there you have it, ladies and gentlemen, picking a side and being firm in that decision will help your business blossom in the best way possible.
The same applies when choosing a business coach to assist you in taking ground-breaking leaps to achieving the best your business has to offer; it’s either you want me in your court, or you don’t – there’s no time for indecision from the middle.
So, let me know whether or not you’d like to have a meeting, a chat, a face-to-face or a much-needed wake-up slap:
+2783 253 3339
I’m kidding about the slap, but I mean, if that’s your thing… I know people…