Market Intensity: One Characteristic of Marketing Strategy

Market Intensity

Marketing strategy varies based on the different kinds of markets a business operates in. One characteristic is the intensity of competition. Intensity includes the number of direct competitors in the niche, as well as the effectiveness of differentiation in the niche.

The example I love is Abdul, who owns a desert oasis next to a caravan route. Since Abdul owns the only water in a hundred miles, he needs no advertising. His customers will seek him out at the risk of death. They will also pay any price.

Contrast Abdul with Yutu, the Eskimo who sells igloo snow blocks. He and the rest of his market live on the snow pack where all can cut their own blocks. Therefore, selling packed snow blocks is difficult . . . a little like “selling ice to Eskimos,” the old cliché.  This phrase is still used to celebrate the best sales people, indicating they could sell products to those who do not really want them.

A market such as insurance includes many competitors, and to most people, the differences in insurance are rarely apparent. The local town niche has many local sales people after the same business, much closer to Yutu than Abdul.

On the other hand, even in competitive markets, companies can be highly specialized, such as selling insurance to religious institutions. This tactic creates a (state) wide market so specialized that the local broker is at a large disadvantage due the very real specialization needed to properly insure a church versus an individual. In this case, differentiation and specialization actually create a separate niche, which moves them closer to Abdul.

When you look for your crack in the market, it is better to act like Abdul, looking to less competitive markets.  In addition, each niche market usually has even smaller cracks in the market, which eliminates competition and lessens the need to hard-close prospects. Differentiation of products, and creating new products for niche markets, reduces the intensity of competition.

Your business goals should revolve around niches where you can occupy and emplace your brand. In the ultimate win, your market should be so protected that your competition doesn’t even consider entering the market.