Developing a successful brand strategy for your brand requires you to conduct research that will help you create an effective positioning and target demographics to build up a successful customer base. The first step to developing a good brand strategy is to perform market research. This initial research will create the baseline you can springboard from for the rest of your brand strategy.
Positioning is what makes your brand stand out, which can be difficult in many markets, especially those that are difficult to break into or which are currently oversaturated.
Market research will help form the foundation of your overall brand strategy. This is what companies need to do before they make the final decision to enter into a specific market. Before LUSH launched their line of beauty products in addition to their standard bath products, they performed market research which forms the basis of their positioning strategy.
The key to understanding an effective positioning strategy is knowing what the core values are and how it differentiates your brand from others. In other words, what you are offering to consumers and how it help define what value the products add to the overall market.
Market research will help understand the value of the products among the customer demographic which will led you to decide if this is a valuable and effective market to enter and if this is a financially wise decision. This type of research is essential for any company, large or small.
You can work on developing an effective market research and positioning strategy by breaking the process down into steps.
1.0 Market Size
1.1 Evaluating Market Size
1.2 Market Research Firms
1.3 Market Research Resources
1.4 Total Potential Customers
1.5 Customer Profiles
2.0 Market Characteristics
2.3 Annual Sales
3.0 Market Life Cycle
3.1 Introduction Stage
3.2 Growth Stage
3.3 Maturity Stage
3.4 Decline Stage
Before you can create a valuable market profile, you will need to evaluate the market size. The market size will give you a good idea of the potential opportunity available to you as a brand. Market size can be evaluated by accessing related numerical data, which includes but is not limited to: Various industry reports, external market data, and even personal experience.
Evaluating market size can be done in a few different ways. One of the most common ways to begin evaluating market size is to look for people in-house who have experience in the market, as they can often lead you on those first steps towards a more expansive evaluation of the current market size. However, don’t limit yourself to a single person or entity as your source for market size. The market size can be influenced by a number of different data factors, so you will need as much information as possible to form a solid opinion on market size.
You will also need to consider whether or not you need external help in determining market size. This is especially true in cases where the market is complex or vast, and you will be unable to do a proper evaluation without accessing data that is not accessible to the general public. In cases like these, consider outsourcing your basic market size research to a market research firm. If you are looking for a market research firm but don't know where to start, consider some of these global innovative firms.
SIS International Research
Insights in Marketing
Evaluative Criteria, Inc.
Insight Strategy Group
Remember: You don’t necessarily have to outsource your market research if you have someone in-house who is capable of conducting the research on their own. Outsourcing is generally recommended if you don’t have the time to do it on your own, or the market is vast and complex and your assistance in extrapolating the information from various market reports—or you simply can’t access them due to the inaccessibility of the market to the public.
If you do decide to engage in your market research in-house rather than resorting to a marketing firm, then you will need to know where to go in order to find the relevant market data that will help you during your search. The best sources currently available include:
US Bureau of Labor Statistics
US Census Bureau
In some cases, you may not be able to find enough information and data to create a fully accurate marketing representation in the case of new markets. In these cases, you will need to estimate according to your best guesses based on current sales as well as an evaluation of future marketing trends.
One of the basic data tables you will need to look at is the number of total potential customers in the market. The total number of potential customers in the market will help you determine whether or not a market is financially viable for breaking into, as well as the overall value of the market as a whole.
In order to determine the total number of potential customers in a market, you will need to evaluate the personal characteristics of the average customer in the current market. This is called creating a customer profile.
The most important information you will need to look at in order to develop a solid customer profiles is relevant information that can help you in your later market research and marketing decisions for your brand. The data you should ideally compile for a business to customer brand includes:
Demographics: They are the basic quantifiable facts about your customer.
Backstory: This is the psychographic information about a user. The personality, values, opinions, attitudes, interests, lifestyle and challenges driving your user.
Needs: Based on the backstory and how it relates to your product service or program, what does your customer need? Why do they need it? Connect these to your backstory as much as possible.
Solutions: This is where the rubber meets the road, this is what you will use to exceed your customer’s needs. You don’t want to just solve your customer’s needs, you want to exceed their needs!
Once you have created a solid market size profile, you can begin to outline the market characteristics that will play a significant role in your initial positioning strategy. The market characteristics can be broken down into three categories: influences, trends and annual sales.
You can perform research on market characteristics in house or you can hire an outside marketing research firm to do the work. As a general rule, especially in the beauty industry, you should have at least one person (but ideally more) working for you that understands the market well enough to research and define market characteristics without requiring outside assistance. Unlike statistical data, knowing the market characteristics is an integral part of understanding the brand and market as a whole, so having people within the brand who know their material is vital.
Let’s take a closer look at these three categories of market characteristics and how you can use them in your brand positioning strategy development.
In order to define market characteristics, you will need to understand what actually influences your market. Are there any events that influence your market? Current/active developments? These can range from everything such as new laws and legislation to popular social trends to the development of new technologies that may create (or eliminate) certain needs on the market.
Trends are vital for understanding the flow of the market, as well as where the market will be heading in the future. For example, the trend of finding organic, environmentally friendly products is leading many makeup and beauty companies towards marketing strategies that emphasize these qualities in order to appeal to a growing number of makeup consumers who are concerned with these elements.
You will also need to look at the annual sales for the relevant products or services in your market. For example, if you sell liquid primer makeup, what are the total amount of sales in the beauty market for liquid primer makeup?
Once you know the number of sales, then you need to consider the overall geographical data of those sales. In other words, where exactly are the sales occurring? Are they local sales, national sales, or international sales? Are they a combination of one or more of these geographical locations?
The market life cycle is essential to the creation of any positional strategy. The market life cycle will greatly influence how you approach the market as a whole, especially in consideration with the other market research you have previously examined.
The market life cycle can be broken down into: Introduction, growth, maturity and decline. The positioning strategy you approach will vary from life cycle to life cycle.
In the introduction stage the product and services (or even the market itself) is fresh and new. You will either be the first person to offer this type of product/service, or at most, one of the first few. In this stage, marketing data is difficult to come by, and consumers (or the market) will not have any knowledge of pain.
In the growth stage the market has continued to grow to the point that annual sales in the market have increased. There are more clear decision makers, and consumers are becoming aware of the product/service as well as a growing knowledge of pain for it.
In the maturity stage there are a higher number of strong competitors active in the market. Sales growth in this stage tends to slow down due to the amount of competition in the market. Consumers will typically already have chosen solutions to their knowledge of pain.
In the decline stage revenue in the market is declining, typically due to customers deciding to find new solutions to their problems or new solutions to their knowledge of pain. Companies in a declining market life cycle will often have to offer discounts, promos and other novelties in an attempt to draw in customers who are typically not interested in purchasing the product/service again unless something new is offered.
Your positioning strategy will form the foundation of your later marketing strategies for your brand. When you conduct the right kinds of market research, including defining marketing characteristics as well as evaluating the status of the current marketing lifecycle, your positioning strategy will be much more effective.