creating and dominating new markets

Creating and Dominating New Markets by Peter Meyer • Hardcover: 256 pages ; Dimensions (in inches): 0.80 x 9.20 x 6.20 • Publisher: AMACOM; (March 2002) • ISBN: 0814406785 | All Editions • Average Customer Review: Creating and Dominating New Markets @Team-FLY Creating and Dominating New Markets PETER MEYER American Management Association New York • Atlanta • Brussels • Buenos Aires • Chicago • London • Mexico City San Francisco • Shanghai • Tokyo • Toronto • Washington, D.C. Special discounts on bulk quantities of AMACOM books are available to corporations, professional associations, and other organizations. For details, contact Special Sales Department, AMACOM, a division of American Management Association, 1601 Broadway, New York, NY 10019. Tel.: 212-903-8316. Fax: 212-903-8083. Web site: www.amacombooks.org This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Library of Congress Cataloging-in-Publication Data Meyer, Peter, 1954– Creating and dominating new markets / Peter Meyer. p. cm. Includes bibliographical references and index. ISBN 0-8144-0678-5 1. New products. 2. Marketing. 3. Creative ability in business. I. Title. HF5415.153 .M493 2002 658.8—dc21 2001053663 ᭧ 2002 Peter Meyer All rights reserved. Printed in the United States of America. This publication may not be reproduced, stored in a retrieval system, or transmitted in whole or in part, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of AMACOM, a division of American Management Association, 1601 Broadway, New York, NY 10019. Printing number 10987654321 This Page Intentionally Left Blank Contents Acknowledgments vii Introduction ix PART 1: Strategies for Creating and Dominating New Markets 1 CHAPTER 1: TheMystiqueandChallengesof New Markets 3 CHAPTER 2: Balancing Your Resources and Your Opportunities 29 CHAPTER 3: It’s the Problem That Matters 51 CHAPTER 4: Choosing the Best Risk 71 CHAPTER 5: What New Markets Are Available to You? 93 PART 2: Applications of the Strategies 111 CHAPTER 6: Funding the New Market Effort 113 v Contents vi CHAPTER 7: What Role Does the Customer Play? 141 CHAPTER 8: Building and Dominating Markets Through Involvement 159 CHAPTER 9: What Is the Role of Information Technology? 181 CHAPTER 10: Using Credibility in Creating and Dominating Markets 201 CHAPTER 11: What’s Next? 217 Notes 227 Index 233 @Team-FLY Acknowledgments Dozens of people make a book into a good book. Some encour- age the right ideas, some help target them. Some just sponsor them. In this case, numerous corporate executives in the United States, Europe, and Asia played critical roles in lending ideas, comments, and suggestions. A number of executives, some di- rect competitors with each other, have graciously worked with us to provide examples. For the ones who were willing to put competitive issues aside, I offer a special thank you. It is not always easy to decide that you wish to open your business up, and I greatly appreciate the fact you have done that here. Likewise, several people took an incredible amount of time to look over the work and help improve it. If you find this work valuable, you should say a silent thank you to David Ludwig, Lori Trippel, Adrienne Hickey, and especially Ilse Meyer. These four have made this a much better work. I have nothing but pro- found thanks for their help. Inspiration comes from many people. For me, Bruce Smith has been a wonderful source. Several magazines have been gracious enough to let me re- print popular articles that they have run. I owe special thanks to Jan Collins of Business & Economic Review, Dennis Organ of Busi- vii Acknowledgments viii ness Horizons, and Fred Knight of Business Communications Re- view. If you don’t like the work, none of these people deserves the blame. The blame rests with me. If you find errors, please tell me so that I can fix them for the next readers. Drop me a line at Peter@MeyerGrp.com. If you find that you want more informa- tion and examples, we will be creating an index of successes. Send me a note and I’ll let you know how to get access. Most important of all, there is one person who made this all possible: Eva Meyer. Not just this book, but the world itself is infinitely better because she is here. Introduction Ever since we had markets, businesspeople have wanted to find new ones and then find ways to corner them. Being Daimler at the turn of the century or America Online at the beginning of the Internet age is a wonderful goal—but a hard one to make real without planning. This book is about what it takes to plan and then create and dominate new markets. The Allure of New Markets But why bother? Why are new markets a Holy Grail for business owners and managers? If you can create a new market and then be the dominant player, all kinds of benefits start to accrue to you. For example: ᮣ You can take the time to do things right the first time you do them. Less calendar pressure allows for more creativity, which can make your work more fun. ᮣ You can make and survive mistakes. Since you have no competition, operational excellence is not as important as it is when you are in existing markets. ix [...]... you can reap the rewards of creating and dominating new markets Creating and Dominating New Markets PA R T 1 Strategies for Creating and Dominating New Markets This Page Intentionally Left Blank CHAPTER 1 The Mystique and Challenges of New Markets As you look to grow your business, you may be asking: ᮣWhy ᮣAre ᮣDo create new markets? there hurdles to overcome? I create new markets, or do I find them?... denominators to success? ᮣHow can I repeatedly create and dominate new markets? This chapter is a start down the path to creating and dominating new markets You will find short answers to these questions and a tour of the basics Once you understand these principles, the entire process of creating and dominating markets gets much more systematic, predictable, and repeatable Once you have repeatable success,... Apple Newton, movies-on-demand at home— all ideas that held so much promise to create new markets and sell millions None worked Just because you have a wonderful idea and can bring it to fruition doesn’t automatically mean that you will succeed in creating a market You face a real temptation, when creating a product, to assume that your invention is so 20 Strategies for Creating and Dominating New Markets. .. familiar issues and solving other people’s problems For many, creating tomorrow’s new markets is simply more fun than solving today’s problems Fun can be an important part of getting repeatable success The Profit in New Markets New markets can be more profitable than existing ones In competitive markets you always face the pressure to reduce prices The Mystique and Challenges of New Markets 5 to match... dollars trying and failing to create a viable market What Are New Markets? A new market is new to everyone Just because a market may be new to you does not make it a new market Consider the market 8 Strategies for Creating and Dominating New Markets for human immunodeficiency virus (HIV) treatments Burroughs Wellcome took a drug for breast cancer and found that it would slow the replication of the HIV virus... can satisfy When you combine need and product, you can start to create a new market Where video-on-demand to the home has failed as a product, AOL, HIV treatments, and the Polaroid Land 10 Strategies for Creating and Dominating New Markets Camera succeeded because customers perceived the needs intensely for these products Four Common Denominators of Success in New Markets ᮣWhen you look at the companies... Time, People, and Money New markets can cost you a substantial amount of time, people, and money When you invest a year and your best people in a new market, they may be great investments, but they are unavailable for other projects If you enter a market that works, this 18 Strategies for Creating and Dominating New Markets is fine If you enter a market that fails, you may miss other markets that would... Strategies for Creating and Dominating New Markets This book continues in two parts The chapters in Part 1 will help you identify strategies for creating and dominating new markets An Applications section of the book provides further details and tactics for those strategies, giving you the examples from which to build Although you’ll find many successes detailed in the book, your own business is unique, and each... pressure You have a chance at faster and greater profitability The attraction of new markets isn’t difficult to understand: You can make a lot of money, have a lot more fun, and get better people to work with you Who wouldn’t want that? What Happens in New Markets? You can find many examples of companies that have created markets and then dominated them I’ll define new markets in detail in Chapter 1, but... are great organizations, but only one has a track record of new thinking and creating new markets Remember that your organization’s sharply honed operational skills are not going to be as useful in new markets Excellence in manufacturing, distribution, marketing, and delivery gives you critical competence in existing markets To create new markets, though, you’ll also need to find or build different . of creating and dominating new markets. Creating and Dominating New Markets PART 1 Strategies for Creating and Dominating New Markets This Page Intentionally Left Blank CHAPTER 1 The Mystique and Challenges. create new markets? Why Go After New Markets? Why are new markets so desirable? Because they are exciting, profitable, and forgiving. The Excitement of New Markets The excitement of creating and dominating. plan and then create and dominate new markets. The Allure of New Markets But why bother? Why are new markets a Holy Grail for business owners and managers? If you can create a new market and then be