Coming up with ideas, planning your business, and following through on those preparations with a startup may appear hard on paper. However, the subsequent challenges of managing daily operations and keeping up with the competition are increasingly more difficult. And while many tech startups and pioneering business ideas have made a name for themselves during their first few, it’s only ever the select few that remain sustainably profitable and equally scalable.
And, believe it or not, a common problem shared by these up-and-coming entrepreneurs lies not in their ability to act on the opportunity but the fault of failing to recognize that the market is filled with like-minded, forward thinkers who are equally capable and compete on the same differentiation. So we’ll be going over how a market mapping framework can help identify your strengths and highlight some key weaknesses to better position your company for success and standing out among the crowd.
Identifying the Factors That Influence One’s Buying Decision
Market mapping, also known as “perceptual mapping,” is a business tool and diagram that plots opposing qualities of related goods, products, and services in a competing market that coincide with consumer purchase-decision factors. And while your company may be providing for a mix of two adjacent qualities that consumers demand, a market map will highlight if that position is saturated with far too many competitors, lacking in innovation, or proposes a potential market gap.
Quality of Product and Service
Companies always compete on the quality of their products and services, and despite the many unique features you may offer, the audience always has the final say, and market capitalization will show which company is fairing better in this regard. In this dimension of purchase decision, the straightforward solution is making your product and service better through further research, development, and innovation by meeting the expectations of your target audience better than the competition.
Price of Related Goods
Like quality, the price of related goods plays a crucial role in influencing the customers’ purchase decisions toward a product and service. And while a particular item may appear more superior in quality, if an inferior product makes up for the difference with cost-efficiency, the latter may do better. We can observe this in supermarket aisles wherein families typically go for more cost-effective purchases with their groceries.
Functionality Over Leisure
Not all products made for fun carry extra utility and vice versa. Plus, it’s not just the extreme ends that count but also those in the middle, providing for functional and recreational purposes. For example, prominent tech brands are moving away from technological innovation alone but are embracing the lifestyle aspect, which is among the leading reasons Apple’s rising market cap reaching $3 trillion.
External Changes in Environment
Last but not least, a wildcard that’s more challenging to plot on a market map are external changes in the business environment like geopolitical factors beyond forecasting, the current global pandemic, and disruptive changes in an industry such as Bitcoin’s unprecedented bullish rally. Often, we can see trends drastically shift according to the momentum introduce by these changes, and the best approach to maintaining stability is pivoting and assuming a risk-averse position.
Maintaining Uniqueness and Addressing Market Gaps
Now, given the many purchase-decision factors mentioned above, the key to gaining a competitive edge and maintaining the same advantage over your competition is focusing on these market gaps, not just from your perspective but also from the lens of your competitors. And whether that position is quality over pricing or going head-to-head in functional and recreational utility, the goal is to identify opportunities that exist for you and your competition, exploiting them faster than the rest.
First Movers vs. Better Movers
When competing on the same qualities and factors, there are two methods of maintaining uniqueness and standing, which are either being the first mover or a better mover. Amazon is an excellent example of a first-mover in the online retail market space, and with that presence created strong brand recognition. However, even first-movers lose out against better movers who can do more and provide a better service, just like how ordering from wholesaler sites like bannersolutions.com guarantees same-day nationwide shipping for door hardware needs.
Innovation in a Rapidly Changing Market
If it’s not in timing or quality, you’re able to maintain uniqueness over the competition. Spotting out trends and matching innovation with a rapidly changing market is equally effective at addressing market gaps. We are currently in a transformative economy that’s still bouncing back from a pandemic-induced recession, creating many opportunities to meet new demand. And if you can provide better solutions for contemporary issues, it’s a surefire way of building a loyal customer base.
Keep Your Customers Close and Your Competition Closer
Knowing your customers and delivering on their needs is at the heart of any business. However, knowing how and where the competition is moving is equally effective in staying relevant within an industry. So while you pivot and innovate to meet emerging demand, keep a careful eye on what everybody else is doing and how the market reacts to change and uncertainty.