Find a need; fill a need. Go after untapped markets. These are the mottos that many entrepreneurs live by, but It's becoming increasingly challenging to find a market with no competition. So, the question remains: Should you offer products or services in an established market?
There are some advantages to entering an established market. An audience already exists, and you can virtually eliminate the step that requires you to educate your audience on why they need your products or services.
But how do you compete in a market with a lot of players? Carve out your own niche. There are several ways to do this:
Niche Positioning and Taking a Different Approach
How do you break into a market with a lot of players? Offer something different. Taking a different approach can help you find and tap into a sub-market that you may not have known existed.
One great example of this approach is BlueCrate.com. The company has been able to enter and compete in the saturated sunglasses market because they offer something different: ‘deal with It' sunglasses. These glasses still offer UV protection, but their design appeals to a niche audience.
Find a need within the larger market, and focus on filling that need. The audience is already there, but your competitors are failing to meet some of their needs. That’s where you come in.
Focus on Pricing
In an established market, competitors typically offer their products or services at a premium. The belief is that customers would rather pay more to deal with a reputable brand.
But you can tap into the market of budget-conscious shoppers by offering lower prices. Of course, this is a short-term strategy that will only work if you plan to raise prices gradually to improve profitability. One way to avoid sudden price hikes is to simply sell your product at the same price as your competitors, but offer discounts to lower the cost.
By taking this approach, customers will have the right expectations. Discounts and sales are temporary, so customers will expect prices to increase eventually.
Offer Value-Added Promotions
Sometimes, it can be unrealistic to carve out your own niche or audience in a larger market. One way to get a foot in the door is to offer a value-added promotion that your competitors aren’t offering. It could be free shipping, complementary products, or free consultations.
The goal is to give customers something that enhances the value of your product or service.
Find Your Audience
If it’s challenging to find your own positioning in the market, it may be possible to penetrate the market by targeting a specific category of customers.
When taking this approach, you focus all of your product building and marketing on catering to this particular category of customers.
Facebook and LinkedIn are great examples of this approach. Both launched at a time when MySpace was the most popular social network. LinkedIn focused on creating a network for professionals, while Facebook focused on university students. LinkedIn and Facebook are still thriving today.
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