Market maturity reality with Boston Beer

People are no longer loyal to products or brands. People are looking for things and experiences that improve their time on the planet. Now that cider is starting to mature out, what will be the next thing that the people find adds to their life experience? Craft … ?



How high is that wall? Identifying market maturity by the size of the supporting service industry.

I’m working on putting together a sales and activation solution for a client who wants to sell into the supermarket channel. While looking through the mountains of information on the internet, talking with people in the business, and researching what others have done, I had the thought that the number of support companies in a market might be an indicator of the market’s maturity.

At the bottom of the product/market maturity curve, the offer is limited, the customers are excited, and the buyers and merchandisers are trying to keep things organized. The market is still new, and there is room for everyone.

As the market matures, the offer increases because everyone smells the opportunity, the customers start to have a much wider choice, and the merchandiser becomes a gate keeper.

A little farther up the curve, the suppliers are starting to bump shoulders, the customers have a wider range of products, but have started to have preferred brand, and the merchandiser has started to choose who will stock based on relationships, support, and money.

It’s the point between the second and the third that the supporters of the products start to flurish. With an ever wider offer, the idea of screaming louder than the rest becomes a requirement, and the suppliers start looking for a way to differentiate themselves from the others. They’ll start with improved packaging (cost increase due to new materials, new designs, and new flavors), but that will pass quickly. They will all start that, and then the next question becomes: “What else can we do”. That is the point that the growth in marketing companies and agents and brokers takes off, and their curve starts to go more vertical. More money then will start being placed into the activation and support of the products and the brand. Supply and demand will dictate the fees necessary, and the barriers to entry will grow. I found an interesting pdf from PWC that demonstrates, on page 3, how the opportunities for service industries grows with the maturity of the market. See it here.

Going back to the idea of identifying market maturity, it’s between the second and third point that the support for the market grows, as evidenced by a large selection of brokers, agents, and sales force companies, and it is this surging of support that we can discover how mature the market is, and the potential percentage of budget that has to be assigned to market-entry, twoit, possibly too much to make it worth the results.

Know more than they do, or at least as much.

Just getting back from my trip to Japan. It was only 3 days, but the jet lag starts to take hold from the third day, and I was there that long…more coffee, or green tea…Tokyo Shinkansen 0415

I thought about a couple of meetings during the flight – had 11+ hours, and I’d seen the films.

It is really important to know your customer’s market as well as, or better than, they do. My customers appreciate when I can speak about pricing or margins. In effect, we have less to hide from each other, and we can discuss how to make the goals happen instead of editing what we are saying to hide “important information”.

I know the majority of my competitors, where they sell, and I have a good idea of what everyone is making in the value chain. I can help my clients by explaining this competitive landscape and give them ideas on what they could do to stay at the forefront of the market. Whether they do what I suggest or not is another question, but I position myself as an “expert” in the category, and that gives them reassurance that they are dealing with a qualified supplier, and even, a partner.

I always do store checks before my meetings including the products, their pricing, and how they buy, and sell. Sometimes I get a meeting with the store manager and that adds more information, new information, that I can use during my next meeting.

Jido hamubaikiGetting this information makes you more aware of your market: pricing; positioning; competition, etc. If you can rattle off 5 different competitors and their pricing, market or product maturity positioning, not only do you impress them and demonstrate that you are an “expert”, you give yourself the necessary information to understand if you’re in the right market to begin with.

There is no replacement for visiting your clients, but you should also be benchmarking for your products, channels to sale, and the competition. It’s a metro ticket, and walking 15 mins. But this time gives you the edge over the 50 other women and men waiting to speak to your customer, and take them from you. It will also give your client the reassurance that they are with someone who is serious, professional, and even, a partner. And this will get you a more loyal relationship that will weather the difficult times as well as the successful ones.

Product lifecycle parallels: a tree.

I was talking with a colleague about the parallels in nature to a product lifecycle – be interesting to read the feedback…

Usually products start out with a core range, maybe one (thinking of the beverage industry). From there, a company will add 1 more ( a light?), and then from there perhaps one to 3 more. After that initial buildup, that may have taken two to three, or four years, then the range extension will take off. Over the next couple of years, perhaps 5 to 7 more types will be added, including some seasonal products. After that there is not much more innovation possible, and the range may end up in the discount category, get bought for a last push up, or be discontinued.

Product dev. tree
Product dev. tree.

So, for the parallel. The tree starts out with a basic single trunk, then begins to branch off, perhaps one or two supplementary stalks. From there, each stalk will make more stalks or branches, each of which will also divide off. All the while, the tree is growing taller, though more slowly. Finally, the tree will reach its maximum height, with a large range of small, final branches. The tree will age, weaken, and eventually, as my colleague said, get blown over.

After looking at a couple of different product lifecycle representations, I noted that there is a lakc of instruction on what to do about the innovation point – towit – when does innovation start?  Taking the tree as an example, if we plant another tree, or trees, when the tree is at its height, and the little finger branches are expanding, is their enough time to compensate for the eventual loss of the tree? Nature is smart, if we can say that, in that trees make seeds, and these seeds should compensate if the main tree is lost. If you take an apple tree, it has its first apples, containing the seeds between 3 and 5 years into the life of the tree, which can live from between 35 and 100+ years.

Another example: If you ever go to the Redwood Forest north of San Francisco, California, look at how the redwoods replicate: they are already having new trunks growing while the primary is still active. I’ve never found an article regarding this (people have other things to do with their days apparently), but I thought it excellent forsight onthe part of the tree to already have the next generation to continue the DNA. In some cases there were three trees, always in a straight line, with the most mature, then the next, and then the new sapling – I’d like to say it was from left to right.

Virtuous Product Life CycleIn nature, therefore, “innovation” starts early, sometimes as early as the product’s lifecycle, with the host planning for its  own end almost at the beginning of its own life. The suggestion to companies would then be to begin by acknowledging that there is a life cycle to the product, and start planning for its eventual end almost at the beginning, turning the standard product life cycle into a “virtuous product life cycle” as I have attempted to demonstrate in the image to the right.

Identifying where to export.

We’re all busy, so I’m going to keep these posts more like snippets, and if you have a question, feel free to ask me to expand on something. I’m starting making the notes, and I’ll write as the ideas and points come to me. Feel free to contact me if you don’t see a post about the information you’re looking for.

So, where to go?

World Bank Top 10 imports

From your list of possible markets to enter(which you established based on population, PPP, and growth (for example)) now you have to establish which market could be interested in your products/services.

Start with “is an equivelant already there?”. If it is in the market (“Made in USA”, imported beverages, or apple sauce) it means that there is an existing market for your product. This means that the market is aware of your product, or its equivalent. It also means that there is a price range at which people are buying your products, perhaps a packaging that is accepted, or necessary, and a flavor that the consumer is used to. Now you will have decide whether your product can meet or exceed these facts.

“Meeting” means falling within existing parameters: price; packaging; or product. “Exceeding” means going beyond in some way, i.e. cheaper, more expensive, sweeter or sourer, or a revolutionary packaging…clear aluminum can?

“Meeting” is positive because if your product is in the same grouping, it will make it easier for the customer to understand it…it also means you’re going to have to have something to make them want to choose your offer over the existng offer (you need to be ready to explain this to the buyer, i.e. imported, but at a similar price). If you “exceed” in some way, you will have different opportunities. For example, maybe you’re the only one who has purple apples, or your production method is so advanced that your cost is half the price of the competition. You might also be more expensive, but if the existing offers are too cheap, the consumers will be reassurred by the higher price as it matches their perceived value of the product, the category, or the region.beersinjapan

What if your product is not present in the market? Identify why – geographical, religious, political, etc., and then establish if these “barriers” are surmountable, and if it is worth it. You could have the coolest product, but to get it to the market, and support it, would completely wipe-out the return, and hence, no interest (unless you’re in it for the glory, and have the funds to use…). Assuming the barriers are jumpable, then you have to convince the prospect why they want to try something they have never seen or tried before. Maybe the market is not that big for “robotic erasers”, but that is your job to explain why your product will solve their pain…

For an excellent on-line source of export related information, including export planning, take a look at the website. Are you interested in entering the export market for business, learn more about what we do for companies considering the export market. Contact us today, or visit our website (landing page for the moment) Goldstream Export Management