Market Development, Market Leadership, and Word of Mouth

Hello, this is Chris Halliwell, Director of the the Technology Marketing Center, in for the periodic post here at the TMC Leaders blog.  For regular readers of Nick Nichols' posts here on technology innovation, please send good thoughts his way, as I'm filling in because his daughter is gravely ill and he is at her side.

Lately I've been in discussions with a colleague about market development.  As we've been kicking thoughts around we find ourselves using two related terms a lot:  market leadership and something we have been calling "influencer marketing."  We've been working together for a long time, so we know what we mean by these terms, but they strike me as loose, and I've found that well defined, more granular, marketing terminology helps teams design and execute more effective market strategy and programs.  So, I did some topeka-ing, er googling, to see what the world thinks these terms mean.

I was shocked.  Only one of the three terms has an official web definition presence:  market development, agreed by most to mean selling current products into new markets.  Market leadership isn't really defined, but when referred to its only standard meaning is that a market player has majority market share (which strikes me as saying the fattest person you know must be the best cook.)  I wasn't as surprised to find lack of reference to influence marketing, something Regis McKenna used to call infrastructure or relationship marketing.  In truth, what McKenna referred to as infrastructure marketing was an early, very clever, way of generating word of mouth through identified opinion leaders in the market; all this pre-internet, pre- social marketing.

So, for your amusement and/or edification, here is the meaning my friend and I were ascribing to these terms as well as a context for how they relate to each other. Market development requires provision of a market-specific solution, a packaged value offering, from the supplier and an infrastructure or ecosystem of market participants.  As you know, the same old product, just wrapped in a new set of messages, doesn't normally barnstorm some entrenched existing solution.  New markets require new investments to create relative competitive advantage and overcome switching or adoption costs.  The supplier who drives these investments in new markets is typically presented with the opportunity to create market leadership.  Early market development, done well, should lead to market share advantage, but share does not in itself confer the market clout of leadership.

I've blogged here extensively on Market Leadership in the past (for instance,The Confidence of a Market Leader)and so will not cover that ground again, except to connect market leadership and influencer marketing programs to create word-of-mouth reference and credibility.  If there is one thing a leader needs, it's followers.  As the market-specific solution is supported by third party market partners, and evaluated by market mavens, it's important to make sure that opinion leading partners, both at the corporate and personal level, are echoing your differentiation messages and delivering evidence of your competitive advantage.  This repetition from opinion leader influences in the market is what was meant way back when by the McKenna infrastructure marketing concept.

So:  market development creates an opportunity for market leadership, which requires reflection and corroboration of leadership from opinion leading market influencers.

There you go...cheers, Chris

Comments

[Edmond Hennessy]

Chris - your perspective and the perspective of your colleagues is interesting.
We normally distinguish Market Development from Industry Development.
Industry development focuses on various sectors/segments like Defense & Military, Financial Services, Retail, Transportation and the like. The Marketing work that is done at this level is directed at Vertical Industry development/penetration.
Typically, we associate Market Development with a different translation that focuses on segments for example in Defense & Military: Navtronics (Surface-Ship Defense/Undersea Warfare), Avionics (Airborne Platforms - Attack Fighters, Attack Helicopters, etc.), Vetronics (Ground-based, Vehicles - Tanks, Missile Launchers, etc.) or they could be application-based: Defense: Target Detection/Acquisition,
Countermeasures, Retail: Warehouse/Distribution and Store-Level Merchandising, Banking: EFTS or Int'l. Letter of Credit or it can be technology/product-specific: Routers, Adapters, FPGA Platforms, Data-Base Management Systems, etc.
Beyond definition - you and your collegues have "translated" Market Development (attempting to put a wrapper around it - with conditions).
Submit that, it is difficult to do this, although do understand where you are coming from.
One interesting phenom,Cross-Market,is how early-stage,firms may do what you are advocating - however along the way they find it difficult to fully exploit the Market potential - when realized, they can become acquisition candidates - which translates into letting the Acquirer (could be an 800 pound Gorilla) drive their Market position to Leadership & Domination, although many times it does not work that way.
Now that we have tapped into your useful blog - we will take a peek regularly.
Good Hunting!
Edmond Hawkeye Hennessy
CEO
Performance Marketing Group
Author: Market Warfare - Leadership & Domination Over Competitors
A breakthrough book endorsed by Jay Conrad Levinson -
The Father of Guerrilla Marketing