WEEK 4

References:
en.wikipedia.org/wiki/Value_proposition
www.kunocreative.com
For this lesson, we will be discussing what
are the key factors that needs researching
to define your market opportunity.
By the end of this module, you should be able to:

1.) Define market opportunity; and

2.) Perform market research
 Differentiator Target Customer &
Market Size Competitors &
Value Proposition Alternatives
Risks & Assumptions

MARKET OPPORTUNITY
Define your Market Opportunity first

1. Value Proposition - "What

user problem will we solve? - in
their terms"
 1. Value Proposition - 1. Start with a PROBLEM
STATEMENT
"What user problem will
we solve? - in their 2. Don't assume you're addressing
terms" a MEANINGFUL NEED

3. Define about THREE

statements PER TARGET
CUSTOMER
4. Value Prepositions are the reasons
people buy - your FEATURES and
FUNCTIONS make it possible
 Value propositions are...
1. Value Proposition -
"What user problem will From the user's perspective
we solve? - in their Individually compelling
terms" Collectively exhaustive
Relevant to me
Not Trivial
Not a business benefit
Not a solution description
Not a list of features
 1. Value Proposition -
"What user problem will
we solve? - in their
terms"

Uber's value proposition, offering Uber convenience

Define your Market Opportunity first

2. Differentiator - "What is our

unique, sustainable
advantage?"
 UNIQUE: not otherwise
available to the customers

SUSTAINABLE AND ADVANTAGES:

competitors cannot easily replicate it

SUSTANTIVE: not trivial,

2. Differentiator - "What
too broad or too narrow
is our unique, sustainable
advantage?"
Your differentiator is why
customers choose you...

Your value proposition is

why they stay... 2. Differentiator - "What
is our unique, sustainable
advantage?"
Define your Market Opportunity first

3. Target Customer & Market Size - "For

whom are we solving this problem?"
and "How interesting is this market?"
3. Target Customer & Market Size - "For
whom are we solving this problem?"
and "How interesting is this market?"

• You likely have MULTIPLE,

COMPLIMENTARY target customers

• SUB-SERGMENT target customers,

even if you will deliver the same
product solution to them

• Constrain your target customers by

their ATTRIBUTES
• Create a PERSONA to bring
them to life
3. Target Customer & Market Size - "For
whom are we solving this problem?"
and "How interesting is this market?"

Attribute
Examples
1. Age Range
2. Gender
3. Socio-
Economic
4. Geography
5. Goals and
Values
6. Motivators
& Inhibitors
7. Technology
Comfort &
Preference
 Main Bases of Segmentation 3. Target Customer & Market Size - "For
whom are we solving this problem?"
Geographic Demographic Behavioural Psychographic
and "How interesting is this market?"

E.g. E.g. "A Level E.g. E.g.

Customer
"Customers & University "Customers "Customers
within 10 Students" wanting a who prefer to
miles of the value for buy organic

Segmentation
M25" money food"
impulse buy"
Customer, Age, Gender, Rate of usage, Personality,
Location,
Region,
Urban /
Occupation,
Socio-
economic
Benefits
sought,
Loyalty status,
Lifestyles,
Attitudes,
Class
(Persona)
Rural, group Readiness to
ACORN purchase
classification
3. Target Customer & Market Size - "For
whom are we solving this problem?"
and "How interesting is this market?"

Market Size
 Use REAL DATA over assumptions whenever
possible
 Show RESTRAINT but make sure the
opportunity is still interesting
 Show a range, SEVERAL SCENARIOS and/or
annual SEQUENCE
 ILLUSTRATE your sizing in highly readable
form
 Defining your 3. Target Customer & Market Size - "For
TAM, SAM, & SOM whom are we solving this problem?"
and "How interesting is this market?"

Total Addressable Market

The TAM is the value of the entire market, or
the total possible demand for your product
or service.

Ex. Say you're introducing a new type of organic, fair-trade

coffee. Your TAM is everyone who drinks coffee everywhere
in the world. In other words, the total coffee market.
 Defining your 3. Target Customer & Market Size - "For
TAM, SAM, & SOM whom are we solving this problem?"
and "How interesting is this market?"

Seviceable Addressable Market

The SAM is the portion of the TAM that you
can actually reach with your product or
service. Typically limited by geography and
demographics.

Ex. You're starting your distribution in a limited region, say

the U.S., and selling to people who like higher-end coffee
and are willing to pay a little more. That's your SAM.
 Defining your 3. Target Customer & Market Size - "For
TAM, SAM, & SOM whom are we solving this problem?"
and "How interesting is this market?"

Share Of Market
Also called the Serviceable Obtainable
Market, the SOM is the portion of the SAM
that you will acquire with your product or
service. This is your short-term target.

Ex. You have some competition, and you're not likely to

obtain a monopolu in the high-end coffee market. The
market share you reasonably expect to acquire is your
SOM.
Define your Market Opportunity first

4. Competitors & Alternatives - "How

are consumers solving the problem
today?"
 4. Competitors & Alternatives - "How
are consumers solving the problem
today?"

Define your competitive set

broadly - look for
ALTERNATIVES too
Don't DISMISS competitors too
easily (or take them too
SERIOUSLY)
Make analysis ACTIONABLE
Why competition is healthy?
 Market validation
 Customer interest
 Efficient operations
 Investment
 User testing
 Execution insights
 Sense of urgency
 4. Competitors & Alternatives - "How
are consumers solving the problem
today?"

Product Positioning
Product positioning refers to what the
consumer thinks of your product when they are
making a purchase decision (E.g. Lowest price,
Best service, freshest produce, "certified
residue free", easy access, high quality...)

Spot out Identify

Identify
the Identify your best
the competitors promoting
unique
Audience techniques
features

Steps in Product Positioning

 4. Competitors & Alternatives - "How
are consumers solving the problem
today?"

Product-Positioning Map
 4. Competitors & Alternatives - "How
are consumers solving the problem
today?"

Product-Positioning Map
 4. Competitors & Alternatives - "How
are consumers solving the problem
today?"

Product-Positioning Map
Define your Market Opportunity first

5. Risks & Assumptions - "What do we

need to test, evaluate, and mitigate?"
5. Risks & Assumptions - "What do we
need to test, evaluate, and mitigate?" Categories of Risk
Customer Interest / Retention
Customer can / will pay
Investment
Marketing / Distribution
Technology / Invention
Competitive
Partner / Supplier Dependency
Regulatory / Legal
Define your Market
Opportunity first
Define your Market
Opportunity first
1. Do you have a clear perspective of, and a
shared understanding in the team for, who
the solution is intended for?
2. Are solving a significant problem and is it
important that the problem is solved? Are
you clear why this is a priority for your
company?
3. Can you articulate exactly how customers
will benefit? Is this a message that can be
communicated to them in a compelling
way?
Define your Market
Opportunity first
4. Have you understood how you will position
your product as a unique improvement over
how customers solve the same problem
today?
5. Do you have one type of end-user or
customer? If yes, do you know for which
one should you optimize your solution?

6. Have you established useful constraints

and context that will serve to focus your
team, making sure to limit the project's
scope?
Define your Market
Opportunity first
7. Do you know what risks might derail your
initiative? Do you know how you are going to
deal with them should they eventuate?

Factors Contributing to
Business Risk Risk Management
- Uncertainty about sales. - Identify risks
- Uncertainty about sale - Risk assess & analyze
price. - Plan action
- Uncertainty about input - Implement
costs. - Measure, control, and
- Fixed operating costs. monitor
- Foreign risk exposure.
Define your Market
Opportunity first

8. When asked, are you able to consistently

and convincingly provide answers to these
questions and other challenges from
stakeholders?
If "NO", then take a step back to thoroughly
define your opportunity before proceeding
further.

Market Research is the KEY!