1. Market Information training
11.10.2011 at Innopoli, Espoo
Juhani Polkko | San Francisco Oy

2. Objectives
• Define market and industry
• Understand positioning
• Know about basics of Blue Ocean Strategy
• Learn about methods for market validation
• See 10 free tools for market intelligence
• Create market monitoring plan & process
• Discuss about challenges and solutions

3. Instructor background
• 8 years in consumer electronics/games
• 2004-2006 in Silicon Valley
• 2006-2007 U.S. startup
• 2008-2009 Nokia Interactive
• 2009-2011 Offerium
• 2009- Freespee AB
• MBA (intl. finance) Aalto/HSE EE

4. Participant introductions (1 min / each)
• What does your company do?
• In what industry you operate in?
• Who are your customers at the moment?
• Are they in Finland or international?
• Do you have a product/service in the market?
• What kind of market research have you done?

5. What market should we be in? How does it fit different industries?
DEFINE MARKET AND INDUSTRY

6. Competitors ?
?
Barriers ? Customers
?
Partners
Market segments
?
Prospects ? Industry sectors
Best entertainment The ultimate
in the market, solution for a well-
following the latest defined, painful
consumer trends problem
Team Finance Technology Business Model

7. Market or Marketplace
• Market = potential customers (prospects)
• Whose problems does your innovation solve?
• Segment your market into different types of
customers (by common characteristics)
– Makes sales and marketing easier
– e.g. in B2B: company size, industry sector, maturity
– e.g. in B2C: consumer behavior, demographics
• Define in which industries your market belong to

8. Industry boundaries
Our market
Telecom
What industry you
Marketing Media believe you are in?
What industry you
should be in?

9. Where are we in the value chain? How about our customers, partners, competitors?
UNDERSTAND POSITIONING

10. STP model
• Group the potential customers by common
Segmenting characteristics
• Behavior, position in the value chain, etc.
• Select the most potential segments (next slide)
Targeting • Focus on one segment only, or limited number
of segments, depending on resources
• Position the offering to become a winner in a
Positioning market segment (“red ocean”)
• Define a new market space (“blue ocean”)

11. Value chain example
Content Content User
Content creation End user
packaging distribution interface
User Value
Money
• Should I focus on one part or several (vertical integration)?
• Where are my competitors? Should I be in the same place?
• Who is the driver in the value chain (demand creator)?
• Select Push or Pull sales strategy?

12. How prioritize market segments
Priority How strong is … Weight
1 Customer’s compelling reason (pain) to buy 30%
2 Customer’s knowledge 20%
3 Potential for market dominance 15%
4 Potential for follow-on markets 10%
5 Product/service maturity 10%
6 Need for intermediaries 5%
7 Pricing 5%
8 Credibility 5%
Source: Chasm Institute / Embrase

13. Positioning = Perceived Value

14. How to make competition irrelevant?
KNOW ABOUT BASICS OF BLUE OCEAN STRATEGY

17. Making competition irrelevant
Red Ocean Strategy Blue Ocean Strategy
Market Space Compete in existing market Create uncontested market
space. space
Competition Beat the competition. Make the competition
irrelevant
Demand Exploit existing demand. Create and capture new
demand.
Price vs. value Make the value-cost trade- Break the value-cost trade-off.
off.
Overall strategy Alight the whole system of a Alight the whole system of
firm’s activities with its firm’s activities in pursuit of
strategic choice of differentiation and low cost.
differentiation or low cost.
Source: Adapted from Blue Ocean Strategy, page 18

18. Value Innovation
Lower Costs
Value Innovation!
Higher Value
Source: Blue Ocean Strategy, page 16

19. The Four Actions Framework
Eliminate factors that are
Reduce no longer relevant.
Reduce features and
simplify offering
New
Eliminate Value Create Create factors the
Curve competition does not offer
Raise the demand by
discovering the value
Raise sources
Source: Blue Ocean Strategy, page 29

20. Examples of Blue Ocean strategies

21. Why most still choose Red Ocean
• Red Ocean is proven market.
• Marketing/sales can be hard in Blue Ocean.
• Blue Ocean often requires more capital.
• Differentiation is usually relatively simple.
• Red Ocean strategy is easier to plan and predict.
• Competition is never perfect.
• No strategy is black or white.

22. Process to learn about market demand and customer aspirations
LEARN ABOUT METHODS FOR MARKET VALIDATION

23. Typical market research methods
• Competitor tracking and analysis
• Trend analysis
• Technology surveying
• Conferences & trade shows
• Market reports
• Co-operation with business partners
• Co-operation with research institutes
• Through media
• Conducing market studies

24. 1. Create the positioning pitch
Company A is a <what do we do, what do we offer, what problem are we
solving and how>
To <what is our primary target market segment>
Who <what do our customers need and why>
Compared to <how to we differentiate – what makes us unique>
others
Our background is <who are we, where do we come from, how do we establish
credibility>
Source: Embrase Business Consulting

25. 2. Find the pain
• Find 3-5 decision makers within your target segment
• Agree on short interviews (ask for opinion, do not sell)
• Interviews should be done by company founders
– If possible; Only exception is language issues
• Make sure the person understands product/market
• Most important questions
– “What keeps you up at night?”
– Test your positioning pitch
– Plans for investing in the space (short or long term)
– Operational contacts within the organization
Source: Infrasystems (adapted)

26. 3. Test assumptions/hypotheses
• Market/customer problem
• Positioning
• Value proposition
• Differentiation
• Target market segment
• Core product features
• Distribution
• Pricing

27. 4. Analyze the results
• Were the questions open-ended enough to create a dialog?
• Is this the right target market segment?
• Did we ask the right questions?
• Were the answers aligned?
• How did the answers compare to our assumptions?
• Do we need to make changes to our product strategy?
Continue until confident you are on right track.
If results are negative, try adjusting the pitch or change segment.
Source: Infrasystems (adapted)

28. Discussion points
• What about consumer products/services?
• When should I buy external research services?
• How to deal with foreign markets?
• Should I sell first or develop first?
• Who should talk to the customers/prospects?
• How much is enough validation?

29. I can’t afford to buy research reports – what can I do myself?
SEE 10 FREE TOOLS FOR MARKET INTELLIGENCE

30. Tool #1: Google Advanced
• Results filtering
• http://www.google.com/search?hl=en&q=spinno&aq=f&aqi=p-p2g8&aql=&oq=

31. Tool #2: Google Reader & RSS
• RSS subscriptions
• http://www.google.com/reader/

32. Tool #3: Google Alerts
• Automatic keyword alerts by email or RSS
• http://www.google.com/alerts

33. Tool #4: Efficient email
• Email filtering and data mining
• https://mail.google.com/

34. Tool #5: Google Trends
• Keyword comparison and trends
• http://www.google.com/trends

35. Tool #6: Ad Preview Tool
• Find AdWords ads in other countries
• https://adwords.google.com/select/AdTargetingPreviewTool

36. Tool #7: Keyword Spy
• Find out which keyword competitors use
• http://www.keywordspy.com

37. Tool #8: Vertical search
• Not everything can be found with Google
• Example (SEC): http://www.sec.gov/edgar/searchedgar/companysearch.html
• Others listed at www.spinno.fi (companies, trademarks, patents, etc)

38. Tool #9: ChangeDetection.com
• Get alerts for any website changes
• http://www.changedetection.com

39. Tool #10: Google Apps (bonus)
• Free email and collaboration suite
• http://www.google.com/apps/intl/en/group/index.html

40. How do we do continuous market intelligence efficiently?
CREATE MARKET MONITORING PLAN & PROCESS

41. Pitfalls and warnings
• Monitoring can easily steal a lot of time
• Set up rules how much employees can use work time
• More important to decide what not to follow
• Always decide what you want to get from the process
• Usually the only good reason for market intelligence is
to create foresight and make shift changes
• Don’t worry too much about the competitors.

42. Simple implementation plan (1/2)
1. Decide on the resources and tools
– Preferably only founders should follow the market
2. Select keywords
– Influencers, competitors, prospects, industry terms
3. Select followed channels
– RSS feeds, newsletters, websites
4. Setup tools and stick with it
– Make a decision how often you change them

43. Simple implementation plan (2/2)
5. Create a schedule for monitoring (max. once/day)
– Preferably outside office hours
6. Save new resources but add them to the used tools
for example once a week
7. If you have open marketing strategy, actively engage
in online discussions or appoint a person to do so
8. Analyze and discuss findings once a month and
decide on action plans for marketing/sales/develop.

44. REMEMBER!
• The amount of information is unlimited.
• 98% of information cannot be found online.
• Most valuable source is your personal network.

45. What challenges have others faced and how to overcome them?
DISCUSS ABOUT CHALLENGES AND SOLUTIONS

46. Case: Freespee

48. Top lessons learned
1) Find the customer pain.
2) Simplify your pitch.
3) Reiterate fast enough.
4) Prepare for long sales cycles.
5) Focus on yourself, not others.

49. Contact info
San Francisco Oy
Fredrikinkatu 61, 6th Floor
FI-00100 Helsinki
Juhani Polkko, Managing Partner
+358 40 543 0825 / Skype: jpolkko
juhani@sanfrancisco.fi
www.twitter.com/juhani
www.linkedin.com/in/juhani