05. Know Your Market

Know your Market

What do you need to learn?

As a Product Manager, you are tasked with the responsibility to determine what are the best next focused set of initiatives that you and your team should take to progress towards the company and the product's goals.
In order to do this effectively you need to understand the market, how is it evolving and what are the opportunities for you to tackle.

In order to define the market, let’s look at different techniques that can we used to identify key attributes to better define your target customer in the market.

• Psychographic Segmentation is used to categorize people based on their values, interests, opinions, and attitude.

Let’s apply this to Sworkit. If you look at their company, they are trying to cater to individuals who are comfortable with technology and confident to exercise individually within the confines of their home without the need to be in a fitness gym space. This distinguishes their target customer very clearly from those individuals who do not like working out of a home but would rather go to a gym and have a place that is dedicated to exercise.

• Demographics Segmentations is used to categorize people based on race, gender, and other demographic traits.

Demographic segmentation is an outcome of the psychographic segmentation since we now know an individual's sexual orientations. Others can be categorized based on age group, income bracket, and geographical locations

• Behavioral Segmentation is another key attribute that will help you understand user behavior. What action do your customers take, why do they take it and when i.e how frequently. In our Sworkit example, the exercisers prefer to work out on a regular basis (could be twice a week, five a week) depending upon a combination of factors such as their fitness level, time available to workout.

• Needs-based Segmentation The key to success will be understanding their unmet needs that will help you pick the right problem to solve.

Let’s revisit our Sworkit example to understand this better. We know that Sworkit exercisers like having a workout routine. What is the definition of a workout routine here? A workout routine could include a specific number of workouts to be completed within a week. This workout routine could be pre-defined or customized but also what goes into each workout matters. If the workout needs of the target customers are: As an individual exerciser that likes working out of home, I would like to join other exercisers virtually at the same time to follow the same set of exercises (e.g Zumba ) vs. As an individual exerciser that likes working out of home, I would like to start a workout and follow the exercise instructions on my TV screen. These are very different needs and there are going to different ways to solve them.

• Market Size. We can better understand the market size based on the target customer that has been defined using segmentation techniques above.

We can narrow down the market size to individual adults who are willing to use digital fitness products like mobile apps to progress in their fitness journey towards an active and healthy lifestyle in the U.S.

• Market Trends
  Next, we want to consider what are the different market trends that affect the company? it could be a combination of different factors such as your customer needs and preferences are changing, technology and advancements in the Fitness is changing. you need to be aware of this. It's important to understand if your identified market is growing or shrinking.

• **Expand Your Target Segment **
  How you expand is very crucial because as a company you're going to have limited resources and time. Define potential adjacent where the company’s capabilities and strengths can be easily extended to create a new product to satisfy a new segment, which will help the company generate additional value in terms of revenue.

You can use publicly available data and information available from your company to define the market and understand your customers. All this quantitative data will become more powerful when you actually combine it with qualitative data because this is going to help you understand your customers better and make your storytelling more powerful.

Talk to Your Customers

One of the most often undervalued but powerful tactic is talking to your customers. Interview your customers to gather information about what they do, why do they do what they do? Is their a current alternative product used, what do they like about? Of course, it requires open-ended questions. Spend time understanding your customers. That'll help you unearth rich insights about them.

With Sworkit, we talked about individuals needing customized workout plans. You can take this information as a given or go ahead and dig deeper to understand why is this needed. It could be a variety of reasons:

• Someone is going through the recovery process and needs to have a custom-built exercises that help them recover without injuring them further
• Their fitness goal is very specific: improve core strength and become flexible
• Their current workout needs a few exercises to be swapped before they could progress to the next fitness level and utilize a pre-defined workout.

Observe Your Customers

Observe your customers. You cannot uncover user-experience focused requirements if you have not observed your target customers in their environment.

In the Sworkit example, we will observe our target customers in a fitness gym.

You observe that users take a break for a few minutes and in some instances, a few users started an exercise and skipped it to move on to the next one.

Observing these nuances helps you ask clarifying questions to gather insights such as :

• One user skipped an exercise due to body soreness today while the other needed to take a break for a few minutes before resuming their workout.

These insights cannot be found unless you observe your target customers and talk to them. Then, when you design the product you will add a feature to skip an exercise or pause and resume a workout. When your customer uses this, they will be delighted and probably say ‘ this product gets me. I like it!’

**That is a moment for you to rejoice! **

Knowing your market goes beyond just knowing who your target customer is and their ‘unmet’ needs at a high level. It is about learning the rich details that define your customer using various segmentation techniques and utilizing them to assess the market better

• Define your target customer with rich attributes such as values, demographics etc.
• Understand the dynamics of the evolving market, the trends and how is it growing.
• Make time to understand your target customers: use interviews, focus groups, survey and even observation to gain such insights.