Product Positioning & Differentiation of “disruptive Products” on Mainstream Markets

In this blog post we want to explore how disruptive products can be positioned on the mainstream B2C E-Tailer market and therefore we´ll start with a short introduction to product positioning in digital markets.

Since we don´t want to establish a case study, all hypothetical elements are possible scenarios and not written in stone. The model is to be used only as an approach to understanding the concept.

Referencing an article we recently published about the definition of disruptive products, we will turn our attention now towards the lucrative mainstream market characteristics and its players.

The above shown info graphic shows possible interruptions between the phases, which display chances for a potential product failure or bankruptcy of a company. The mainstream market consists basically of 2 main segments, which we want to define as follows:

1.) The early mainstream market – Segment 1

The early mainstream market is traditionally dominated by customers who look for a practical solution to an existing problem and have the necessary financial means to buy the solution to their problem in form of a product.

Basic characteristics of segment 1 mainstream customers:

  • pragmatic personality
  • taking risks in trying new products / distribution channels
  • in possession of necessary financial means
  • contacts to members of the reference segment “early adopters “
  • looks for mature products to solve a specific problem

2.) The late mainstream market – Segment 2

The late mainstream market is dominated by customers who have a conservative attitude towards innovation and “disruptive products”, and only use them because their reference group (mainstream market segment 1) uses them and seems to be better off with it.

Basic characteristics of segment 2 mainstream customers:

  • little to no risk trying new products / distribution channels
  • in possession of necessary financial means
  • contacts to members of the reference segment “mainstream market segment 1”
  • buys products just because it is now the “De -Facto “standard

Now that we have a general idea what the general personalities and characteristics of the two mainstream segments are, we can turn to (generalized) product positioning.

A brief remark: The above stated model of the mainstream market is misunderstood by many e-commerce companies / start-ups, etc. and generally not applied to its full potential, resulting in a decreased utilization of the financial potential a good “disruptive” idea might offer. The mistake is to assume that the mainstream market consists only of segment 1, which in reality represents only 50% of the market.

Product Positioning & Differentiation

In order to initially enter the mainstream market, its important to understand, which the necessities of segment 1 really are to enable a positive purchase decision.

The following basic necessities can be established:

  1. The product must be easy to purchase
  2. The product has to cover necessities completely
  3. An innovation must be present (Save time, low price, easy way to use product, extended functionality, etc.)
  4. Delivery time must be reasonably short
  5. Secured continuity of the company selling the product

In order to successfully establish the product on the mainstream market all of the above requirements have to be fulfilled. As well, its important that the customer understands that the paradigm to consume the product is the one that will dominate the market in the future.

Things are different with the segment 2 of the mainstream market. The customers in this segment are not willing to take any risks and will not accept solutions that have not been tested over and over again and that are already established on the market.

The following basic necessities can be established:

General necessities for a positive purchase decision in the segment 2 are:

  1. Reference group segment1 uses the product.
  2. Product development is completely matured.
  3. The selling company is firmly established on the market.
  4. Competitive products exist (just in case the product doesn´t perform as expected).
  5. Sufficient product support is easily available.
  6. The product is the industry standard.

 

 Potential differentiation model segment 2 – conservative buyersSegment 2 Mainstream Markets

 

In order to establish a position on the mainstream market its important to have sufficient competitors who will serve as reference points. To ensure the product will dominate its competitors on the mainstream market the marketing message has to be changed from “product oriented”  to “market oriented“. This allows that pragmatics and conservatives alike can build up trust at the same time and perceive the product as the market leader.

Examples product oriented vs. market oriented marketing messages:

 Product Oriented Message

 Market Oriented Message

  •  The best Product
  •  The most sold products
  •  Appealing Design
  •  “THE” Industry standard
  •  Unique functionality
  •  Customer Service / Availability

 

By |2016-10-24T16:15:05+00:00May 30th, 2014|Consulting, e-commerce|Comments Off on Product Positioning & Differentiation of “disruptive Products” on Mainstream Markets

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