In marketing we often hear of the four P's: Price, Product, Promotion, & Place. But what we often fail to teach our business students is what comes before we ever talk about any of the P's... the market. The P's only matter once we know what problem we're solving, how many people have said problem, what they're willing to pay to have the problem solved and how many times in a given year the problem occurs. It's only after we have defined our market that we can then discuss what product we're selling and for what price. I will go into much more depth on "The Market" in the first series of Selling As A Science. Understanding your market is the fundamental first step that most sales and marketing executives miss, and it's often times because we jump straight to the 4 P's. Market's are broken into two sections with the first section being defined as:
1) What problem are you solving? There are needs, wants, and desires in life and people pay for these according what they are the level of pain they are by not having this problem solved. So, the first step in identifying your true market is to deeply understand what problem you are solving.
2) What is your solution for said problem? How are you solving this problem, what is your solution that people will buy to solve the problem, need, want, or desire they are facing.
3) What price are people willing to pay to have said problem solved? This is not your "price" this is merely a range or prices that people are willing to spend to have their need, want, or desire fulfilled. In part 2 we will discuss where does your product fit on the quality scale, high-price or low-end commodity.
4) How many people are willing to pay to have said problem solved? Now we know how many people x the price they are willing to pay to understand the total addressable market. This understanding will greatly aid in our development of promotion and place.
Understanding the first four segments to Part 1 of "The Market" will lay the ground work as we begin to develop a complete understanding of addressable markets and the best way to sell into our target addressable markets.
Selling As A Science to launch October 30th!