As I see it, there are three kinds of markets – Growth, Mature and Declining. Here is how I define them:
Growth Market: exists when a significant percentage of potential customers have no solution in place. In this type of market, a seller must enable a buyer to understand a need they may not know they have. You must also enable them to understand a solution they may not be familiar with. Companies in growth markets should be less concerned with market share and more concerned with market penetration. It is particularly important that sellers do not allow their offering to be commoditized in a growth market.
Mature Market: exists when a significant percentage of potential customers have a solution (or what they believe is a solution) in place. In this type of a market, a seller must enable a buyer to understand the differences that exist between their offering and the ‘solution’ that is in place currently. While this is traditionally achieved by comparing benefits, these days it is much better to make the offering a prescription drug and enable the buyer to become aware of problems and/or consequences the offering they are using currently does not address. Commoditization is a major danger is mature markets. In a mature market, market share becomes increasingly important.
Declining Market: exists when a significant percentage of potential customers have a solution and the use of that solution is decreasing. Envelopes would be an example of a declining market. This is a dangerous market to compete in. Commoditization rules in declining markets. Non-commoditized solutions that have not been commoditized yet need to find an unserved or underserved aspect of the market quickly and transforming it into a niche that offers a growth opportunity.
I’m sure I’ll be blogging on this subject quite a bit in the future. For those looking to compete now, here is the fundamental difference between selling in a growth market and selling in a mature market:
In a growth market, you’re looking to ‘grab land.’ In a mature market, you are looking to ‘shift land ownership.’ Growth markets have more buyers who naturally focus on total value, because they are curious and interested in learning more about something new. Mature markets are more dominated by people who view offerings through the lens of fundamental value because they have already been exposed to the offering in some form and feel they already know what they want. It is important that you identify which market you are competing in and that you align your go-to-market strategy behind it.
If you have any questions, let me know. I’d be glad to discuss how this applies to your situation. Just e-mail email@example.com.