Understanding Market Need
Last week, the Fire Enterprises, Inc. (FEI) tribe kicked off product strategy discussions by reviewing the importance of creating product differentiation. This week, the topic around the FEI conference table is why understanding market need for potential products is a crucial early step in the product development process. Remember, fire = print.
The FEI tribe gathered in the conference room for a product development meeting. Zoot, Numo, Marka, Org and Lucy each took a seat around the stone table.
Lucy pulled a piece of bread out of her pocket. “We need to determine the market share commanded by FEI’s current products, and identify market niches that can be filled with new offerings,” she said.
“How long has that been in your pocket?” Zoot asked.
“Let’s take a lesson from Pompei Bakery,” Lucy suggested, holding up the slice of bread. “They used to only sell white bread, until they discovered that consumers also wanted wheat, whole grain, French, Italian—you get the picture.”
“Fire is like bread,” Lucy continued. “We just need to find the ‘wheat’ and ‘whole grain’ type niches in our market.”
“How?” Org asked with curiosity.
“Identifying new market segments in which to focus our product development efforts is a three step process,” Lucy explained. She scribbled the following on a whiteboard:
1) Create a product map of current products, their position in the marketplace and relative niche sizes.
2) List new “category creation” possibilities.
3) Narrow list to the ones that are “near” fits with FEI’s core competencies.
“New product development is easy, if that’s all there is to it,” Zoot said warily.
“I didn’t say that!” Lucy objected. “There are many more steps to the product development process, including due diligence, plan, punch holes in plan, plan again, market test, modify plan, launch.”
“And, I need assurance that these market expansion efforts will produce a return on investment,” Numo added, wagging a bony finger.