industries. But, in October 2001, the company launched the iPod, which was aimed at young people. It became a lifestyle purchase and a statement of freedom.
one minute wonder Think of a company that seduces you with it’s advertising and products. What is it about them? Now consider how you could do the same to your customers.
Two years later, the company introduced iTunes, which added a recurring revenue stream. Within seven years Apple had sold 150 million units and transformed the company and the entire music business.
The Emirates example. In the 1980s airlines were totally transaction based. If you wanted to fly, you bought a ticket and that was it. But Emirates broke the mould when it decided to sell the sensuous experience of flying. They changed their slogan to “Fly Emirates, keep discovering”, and put their 16,000 cabin staff in designer uniforms. With minimum cost, they dramatically increased the perceived value of flying Emirates. Since then, the company has won 400 industry awards.
The Red Bull example. In 1987, a European company launched a sports drink called Red Bull. Its marketing was aggressive and it sponsored sports and extreme activities: Formula 1 racing, snowboarding, surfing, skateboarding and windsurfing. It is clearly aimed at young men and now produces a monthly magazine called the Red Bulletin, available online, and free in many bars, clubs and hotels. With its memorable slogan, “Red Bull gives you Wings”, today the company sells more than 3 billion cans a year around the world.
All these companies have one thing in common. They’ve each found out how to seduce their customers effectively. You must learn how to do the same. It starts by clearly understanding what you do and what you want your customers to feel about you. Find out more about this in Secrets 2.2 and 5.10.
Learn to seduce your customers so that they keep wanting you.
Your market is vital. It’s the group of potential customers who will use your type of product. So you must understand who will buy your product, why they will buy it and how they will make the decision. This is where you need to be part psychic, part psychologist. You also need to realize that marketing is like warfare, and you will probably need to use guerilla tactics. This means you must spot opportunities and attack little bits of the market, one at a time.
Do you start with a product, an idea or a skill? Whatever your answer, you must find a gap in the market to focus on. You’re not likely to succeed if you go head on against a business that is already established. You must find a group of potential customers that the main players have ignored.
Think about how Nintendo spotted a gap in the crowded market for computer game consoles. It chose families, rather than teenage boys, and the Wii has become one of the marketing success stories of the last few years. A gap in the market is called a niche. It must be large enough for you to make a reasonable profit and small enough for you to dominate it.
case study AT Cross is famous for its gold-plated writing instruments that every up-and-coming executive wants to have. Rather than attacking the whole stationery market, and making every sort of pen and pencil imaginable, it has chosen to focus on the high-price niche, and has added business bags and gold-plated accessories, such as cuff links, to its exclusive product range.
Product niche. Your product could have a unique feature that appeals to a particular market group or application. Dyson’s Cyclone vacuum cleaner is an example of this type.
Location niche. This is usually a service, such as a local convenience store that’s open all hours, or an airport departure lounge shop.
Customer niche. Find a group of potential customers that have similar characteristics or interests that you can easily identify. The grey market, for example, refers to people over 60. Extreme sport enthusiasts form another market niche.
Low price niche. You could decide to reduce the quality or the number of your product’s features and sell it at a reduced price. This is what the food suppliers do with their ‘own-label’ products.
Luxury niche. You can price yourself into a market with a high quality, stylish and expensive product. The most important aspect of this niche is to have the right image and reputation. Honda created a new brand, Lexus, to move into the luxury niche. It also built a new dealer network to distance itself from the existing Honda brand.
If you already sell a product in a particular market niche, you need to see if there are any other niches where it would also sell. Often you can make a simple modification and sell it into another group of customers. There’s more about this in Secret 3.4
You must find a niche in the market, without too much competition, where you will sell enough to make a profit.
2.2 Define your ideal customer
The work that you do to define your potential customer is probably the most valuable time you spend in marketing. Traditional marketing people call this segmentation, and they will put a lot of time and energy into getting it right.
Let’s assume that you have an idea for a product and need to decide who it’s aimed at. The best way to do this is to have a meeting with two or three people who know the product and the type of customers you’re interested in, then take these four simple steps.
1 Start with demographics. If you are selling to consumers, this is their age, gender, income bracket and geographic location. If you sell to businesses, it’s their size, industry and the region or country in which they are based.
case study In the 1950s, Parker turned the pen business on its head when it decided that its ideal customer was someone looking for a gift. Parker Pens put more money into the packaging, so their products became presents. These days, we have specific pens for pre-school children, school children, students, office workers and professionals. And nobody actually buys a pen for themselves.
2 Look at buying habits. Will customers be heavy users and buy your products and services every day, week or month? Or will they buy only once every few years? For example, office workers in the city may buy coffee from the same place every day, whereas, at the other extreme, people tend to buy a car only every few years and a house just three or four times in their life.
3 Consider who will purchase the product. And how they will pay for it. For example, baby clothes are for babies but they’re bought by parents, grandparents and friends. Will people pay for your product with cash or credit card? Or, in the case of a very expensive item, will they need a bank loan? If so, you might like to approach a bank so that you can arrange loans on behalf of your customers. That would be a great added-value service.
4 Think about the motives for buying your products. Is it a lifestyle purchase, where customers buy to feel good or improve their status in their community? Or will they buy to solve a problem, save time or reduce costs? And think about whether they will make a decision based
