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Market Position vs Market Share

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    Let’s be clear about one thing: you sell to customers and not a market. Knowing “market share” is a useful metric in determining the relative effectiveness of a sales organization or product. It provides a snap-shot of where a vendor stands in comparison to competitors with regards to the universe of a defined range of products or services sold into that marketplace. Market share, simply put, a measurement of past performance. It can be used as a benchmark for the determination of future successes, but it cannot provide reliable input to future needs or trends.

    While we often talk about what the “market” demands, no such “market” anywhere ever wrote out a check for anything. We all must understand that a “market” is the composite of a group or class of customers having a common description of what they do and a common need for a product/service or type of product/service that helps them do it. You can’t ask the market what your market position with it is, but you can ask the individual companies comprising the market what your position is with them.

    Some of this market assessment can be quantitative; that is, individual quantitative responses which can be statistically tabulated into some symbolic mathematical distribution of how the market sees you; X percent said this, Y percent said that, for example. This type of evaluation does have its place when you’re dealing with very large “markets” where “means” (averages) and sigma distributions can provide both center shot and rim shot targets, particularly for “commodity” type products. On the “average,” the market wants . . .

    But in this scenario, what does this tell you about what your individual prospects and customer will want, and will buy, in the future, from you? In smaller markets, what would the few leading prospects . . . and your key customers. . . like to see from you? What position do you occupy in the minds of the users? The need for this type of information – not to be confused with data – is even more critical if you’re selling, or plan to sell, a non-commodity product/service, perhaps even a custom or semi-tailored product. A macro analysis of trends in your customers’ industry and . . if they’re not the ultimate end user . . . of trends in their customers’ business, can yield valuable insight. At the least this can help keep you from being whipsawed by “surprises” you should have seen coming. However, “micro analysis” keeps your doors open and tells you where you need to be in the customers’ minds. Certainly, macro assessments can, and should, be made from micro-analyses, but in most cases your customers define the market they’re in, and what they will buy from you, or won’t, customer-by-customer.

    Balancing out this need for, and the value of, both macro and micro evaluation is a challenging issue. The best place to start is with your prospect or customer – the folks who may eventually sign the checks or who are already doing so. Your Customer is Your Future Solution Development or Customer Development – which of these has the best potential for providing real growth leverage for your company? Selling what you have available today falls to the bottom line on this year’s income statement but does not guarantee future success.

    Customer satisfaction measurements can determine the legitimacy and credibility of your current product or service offering. Variable components of your quality, post sales service, responsiveness, communications, ease of doing business, and comparison of these with your competition can be qualitatively and quantitatively determined through a variety of means, including satisfaction surveys. A survey which focuses on your current performance can be a powerful tool for identifying where you stand in your customers’ opinions. It facilitates tactical course corrections or confirms that you are on the right track.

    Your future, by definition, connotes a place where you have yet to arrive and possibly things you haven’t done before (as opposed to simply more of the same). Your customers’ future determines yours; wouldn’t it be crucial to know if you’re going to be included? A market position – and the positioning activity required to place you there – is your current base for future operations, unless you’re planning something really radical. How you got “here” has a varying degree of relevancy for how you plan to get “there,” depending on the new destination.

    Unless you are embarking on a radically different path, your successful journey to “tomorrow” depends on the current position you occupy in your customers’ mind. Not only does your reputation precede you, it also determines the ease or difficulty of your future success. Of course, if your strategy is simply “do more of the same to the same,” instead of reaching out to pull yourself ahead to the future you’ll simply be waiting for it to arrive . . . and you’ll have to settle for whatever arrives with it. Market Position and Customer Satisfaction

    Although an effective customer satisfaction survey must include some assessment of your customers’ attitudes toward your company overall, its main focus will be on the product/service you currently provide. A “Market Position Survey”, on the other hand, take your current position and presence and project it “down the road” to see how well you might fit in some future period. In one such survey, it was learned that although a competitor had an excellent product, this customer didn’t like the competitor’s business practices, didn’t trust them, and wouldn’t do business with them in the future.

    This is an outstanding example of poor positioning. A “Market Position” survey essentially ask a group of customers to tell us how they perceive a company in the larger marketplace. They don’t cover a statistically valid sample of your total available market (which might very well be global), or necessarily even a mathematically correct model of your current customer base. Instead, the focus is on a quality based representation of your known world by contacting a selected number of the people who know you best; each customer, one at a time, qualitatively. You Must Know Your “What’s”

    In any commercial relationship there are three levels of What to be considered: * What #1 is what you are selling (or believe you are). This is a description of your products/services and covers what you produce, its attributes, and what is not included. What #2 is what your customers are really buying (the actual product/service and the perceived value). Knowing this is crucial to understanding the value that your customers expect: it determines your price strategy, promotional activities, sales strategy, branding, and other aspects of your positioning. Further, it defines where your products fit vis a vis competitive offerings.

    What #3 is what your customers are buying from you that they cannot get elsewhere. Knowing this is the ultimate goal of your customer relations. This is their perception of your (perhaps) unique value proposition; it is why they select your offering over a competitive solution that may be priced less, have different features and benefits, or otherwise a different value package. Market Position surveys concentrate primarily on Whats #2 and #3. Sometimes in the process of inviting your customers to tell us how they perceive your What’s we find out a lot more about their Who.

    That is, Who they are as the foundation for What they want from you. The survey will ask a lot of “whats,” and the surveyor must listen, and then ask a few well-placed “whys,” as in for example, “What do you think (ABC Company) needs to do in order to garner a larger portion of your business in the next two-to-five years? ” then, “Why? ” This provides an indication of current position, demand shift, and direction and rate of change. These individual responses are then put together in a manner that provides a real world indication of where you had better be going with your What.

    Market Position surveys, typically, don’t provide crunched numbers and statistical analyses. Instead, they provide evaluations of what your customers reveal when given the opportunity to think outside the box that currently delineates the supplier/vendor relationship. These evaluations are made by experienced marketing and management experts and not by statisticians using inside the box algorithms. Recommendations which accompany these evaluations are in the context of the information needed in order to secure a vendor’s current market position or to chart a new course to become properly positioned in the customers’ minds.

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    Market Position vs Market Share. (2016, Dec 22). Retrieved from

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