Understanding Your Market

The marketplace – and its relationship to your product – is organic, forever evolving and morphing, oftentimes in ways that neither the marketer nor the end user anticipated, intended or even recognizes. The only way to assess that relationship accurately is to walk in the target’s shoes, get on the ground level with them and understand the challenges they face, the rewards they seek and experience what it really is that drives them to purchase and to embrace your product.

Executive Summary

There is no marketing function more vital than understanding one’s audience and the market you serve.  The most inventive creative will fall flat if it is not truly relevant to the market.  The most extensive media buy will be wasted if it is not meaningful to the intended audience.  The most effective diffusion marketing promotion concept will be stuck in the starting gate if the motivations of the market are not properly understood.

Marketing is a discipline of observation and understanding.  But it is not meaningful if it is based solely on traditional research.  Research provides only one face of market understanding – perceptions of product use based upon what the user believes to be motivating reasons.  And the marketer’s interpretation of such data is limited by their own prejudices and assumptions, usually not based on the same view of the market as shared by the target audience.

The marketplace – and its relationship to your product – is organic, forever evolving and morphing, oftentimes in ways that neither the marketer nor the end user anticipated, intended or even recognizes.  The only way to assess that relationship accurately is to walk in the target’s shoes, get on the ground level with them and understand the challenges they face, the rewards they seek and experience what it really is that drives them to purchase and to embrace your product.

This is never a process of making that relationship what you want it to be, but rather understanding what it is and having the insight to enhance the natural development of interaction between user and product to enhance it and minimize the interferences that minimize and obstruct its growth.

Understand what business you are truly in

It is impossible to truly understand your market without first truly understanding what business you are in.  Just because you are selling hotcakes, that doesn’t mean you are in the hotcakes business.  Whether you like it or not, your customer decides what business you are in – not you.

To your customer, those hotcakes may not be about food or breakfast, they might be a quick reminder about how loved they felt by Mom when she would make hotcakes. Or they might mean “happiness” to a child and a great way to start the day.  To a truck driver, they might mean sustenance and vigor.

So without knowing this, selling those hotcakes on the basis of price or the quality of the flour and eggs used might be meaningless to the customer who sees in them nostalgia or happy times or hardiness.

A realization must be made that purchase decisions are motivated by much more than just rational evaluation.  Products and services are judged not just by value perceptions and functional benefits, but by a whole host of variables – some of which may not even be readily apparent to the buyer.  While you may want to tout the results of R&D making your product, better, tastier, faster, shinier – all attributes important to the consumer – that may not be what is most important to them.

To them, you are not in the hotcakes business, but the comfort business.  Failing to recognize this would lead to critical misinterpretation of target audience actions and motivations.  You would be looking for evidence as relates to hotcakes while your consumer is acting in relation to a desire for comforting.  This would result in a fatal failure of insight and planning.

To get to a fuller understanding of what business you are truly in – according to your customer – ask yourself some simple questions:

  1.       What value does my product/service add to my customer’s life?
  2.       How am I enhancing it?
  3.       What basic need do we fulfill?
  4.       Why do we uniquely fulfill them?

Understand how your business truly impacts others

Now that you have a better grasp on what business you are really in, you can begin to analyze how it truly impacts the audience.

With the ability to see, through the audience’s eyes, what it is that you are delivering to them, it’s possible to more clearly understand the effect you are having on their lives.

If you are in the business of nostalgia, then your hotcakes may be invaluable to providing a boost to a dreary start of the workweek or the antidote to stress.  If you are supplying happiness, your impact might be as the portal to lightheartedness and being a kid.  Hardiness? You’re supplying an extra needed boost, encouragement, motivation.

This impact is critical, because without a proper understanding of it, meaningful conversation with the target is impossible.  You will be offering one set of benefits, while your audience will be looking to you for something very different.

The key, again, is to separate yourself from the prejudice of what you want your product to be or what you thought it was.  An objective analysis of how your product is integrated into the consumer’s life and from there is shaped to fit its way into various need fulfillments is needed.  This, more than any other form of research is the critical ingredient to understanding your market.  It is based not on perceptions from the audience, but on their actions and goes to the very core of the relationship that exists between product and user.

Who does it really impact?

Each product impacts many lives, not just the primary consumer.  As products fulfill emotional needs as well as functional needs, they have a ripple effect on friends, family and co-workers.  This is crucial to recognize because in some instances the audience you should be trying to understand and reach may not be the actual user – or even the purchaser.  Sometimes, a primary purchaser might be the decision maker and their motivations may be very different than the consumer for whom the product is primarily developed for.

In not taking this step – that is, making an effort to understand who is really impacted by a product – the marketer runs the risk of attempting to understand the wrong message.  In that instance, whether observations are right or wrong, the results can be disastrous with messages significantly out of sync with the motivations and needs of the purchaser.

Take for example the hotcake consumer who is coming in for a dose of nostalgia and comfort.  While they may be the primary purchaser and consumer, they might be purchasing because they were prompted to by a loved one or because they want to provide reassurance to a loved one that they were taking care of themselves through their purchase of hotcakes.

How can you determine the intricate network of impact that is involved in product purchase and use?

Draw a diagram.  At the center, you’ll have the primary consumer.  From there draw lines out to connect to all those in his or her life that have some level of impact from the primary consumer’s use of the product.  Take into consideration who might actually be the purchaser in that relationship.  Assess whose influence might have the greatest sway over the user and/or purchaser.

Through this type of visual analysis, the centers of true impact will become apparent and greater insight into understanding the market available.

A little market research for context


While much of the research and analysis that has been discussed to this point has been qualitative in essence, quantitative metrics, of course, are of essential value as well.

Traditional research into demographics such as income, occupation, family status, age, gender and geography not only help accurately identify and define target audiences, they also provide context that aids understanding and insights.

Motivations and needs differ when placed within the context of demographic research.  The need for comfort and nostalgia takes on different meanings when the audience is defined as a college student away from home as compared to an aging couple facing retirement.  The context of the situation as provided by demographics helps guide insight into the sources of motivations and the resulting impact and effects of product purchase and use.

This is not to say that insights such be gleaned from demographics, but merely that demographics should be one of several factors contributing to such insights.  It is too easy in an attempt to understand a market to make assumptions based upon demographics – that the rural couple on a budget is primarily motivated by value whereby the upwardly mobile urban single is driven by a need to enhance attractiveness.  Demographics can skew perspectives and generate false conclusions.

Rather than just being the starting point, they should be an overlay to help one determine reasons and rationales for why an audience might behave as they do. Additionally, they might provide indications of new avenues of insight to pursue either through examination of influences or those who are influencing the target.  For example, identification of an audience as primarily single but is still motivated by nostalgia and comfort would indicate perhaps that investigation of the influence of a parent – as compared to a friend or spouse – would be advisable.

See it first hand


In the end, there is simply no substitute for ground level observations and walking in your customers’ shoes for a bit.

Focus groups are often swayed by group think or efforts to supply what participants think you want to hear.  Qualitative research is shaped by what is asked and what respondents genuinely believe but that might be patently false.  Quantitative demographics can be pulled and shaped by assumptions and pre-existing prejudices.

The only way to really know your audience is to observe them – in a real life setting and situation.

Motivations can be understood, needs explained, process and ritual uncovered, assumptions confirmed or hypotheses deflated simply by watching your consumer’s life intersect with your product.  These observations are important both on the product purchase side and the product use side.  How product purchase decisions are made provide good insight into the relationship that exists between your product and the market today. It is a culmination of existing outreach efforts and how they have motivated a target to trial.  How the product is used is an indication of where that relationship might be heading.  As you target uses your product, they gradually work it into the flow of their lives.  Where this flow goes is a good indication of the evolving view of the product and the need it fulfills and what that might result in moving forward.

There are several ways to accomplish this. Many marketers, for example, will don an apron and get behind the counter of a retail outlet.  This provides a good sense of how the audience approaches purchasing at point of sale.  Other marketers have literally parked themselves in consumers’ homes, watching daily life and how their product plays a role.  Others, such as myself, have become members of the trade associations representing the B2B customers we work with, going through the same training as them in an effort to better understand what customers face and how they work to overcome challenges.

Regardless of the approach, first hand observation is a critical component to really understanding an audience – from their perspective.

Don’t let assumptions prejudice perception


In a documentary on quantum physics called “What The Blank Do We Know and How Do We Know It?” there is a segment that contends European sailing ships off the coast of the New World, literally could not be seen by native inhabitants simply because they had no context or explanation for them.  The filmmakers believed that for the observers the ships literally did not exist – that they could not be seen at all – because those on the shore had no capability to look for them.  They couldn’t even conceive that such things existed.

And therein is a cautionary tale for marketers looking to understand their market.  Enter into analysis with an open mind because an operating presumption may very well prevent you from seeing reality.  You simply will not see things that you are not anticipating or expecting to find and that you are not looking for.

We not only have a tendency to look just for that evidence that would support a theory and ignore or dismiss any information to the contrary, we are also programmed to find patterns where none exist.  In a drive to make sense of what seems to us to be anarchy, we try to bring order and predictability by “identifying” patterns.

The concept of not seeing what you are not looking for was dramatized in a famous experiment developed by Harvard University whereby participants were asked to watch a video of people dribbling a basketball and count the number of times the ball bounced.  About half way through, someone in a gorilla suit casually walks through the scene.  Afterwards, some 50% of those who participated reported not seeing anything unusual in the video when asked. They couldn’t see the gorilla because they were not looking for it.

Therefore, when approaching assessment or re-assessment of a target, do not establish a conclusion beforehand to substantiate or disprove.  Allow research to guide your view.  At each critical stage ask yourself if the direction you have chosen to pursue for further understanding is based on and can be supported by the research – both qualitative and quantitative – that has been conducted, or if it is guided primarily by a desire to prove one’s point.

Bringing it all together


The most challenging aspect of data and research is what to do with it.

Measurement technologies are improving rapidly.  Along with them come volumes of data with increasingly granular layers of analysis. Just reviewing all the data available is daunting.  Determining how to leverage it can be near impossible.

Yet processing of research is vital to being able to understand a market.

The first step in being able to digest data for audience insights is to determine how macro or micro you need those insights to be.  Certainly, to gain big picture understandings you have to go macro.  From there many of layers of understanding are needed and can be sought by taking segments of different types of research for micro understandings.

For that big picture breakthrough, research can be easily condensed into macro observations.  Both quantitative and qualitative data can be categorized into umbrella “truths.”  And from here, a very simple exercise can get you started.


Consider, if you would, your product, your audience and the influences on your audience as three overlapping spheres or circles.  Within each, list key attributes, observations or findings.  Take the highlights of research gleaned from traditional methods and first- hand experience and summarize them into phrases listing them in each circle.

For our hotcake consumer, for example, product attributes might be “comforting,” audience needs might include “de-stressing” while the influencer concern is that the consumer takes care of themselves and is nurtured.  When scanning the various attributes listed for each then, common denominators begin to appear that lead to insights and understanding.  In this case, the attributes for comfort, the need for de-stressing and the concern of nurturing all lead to a realization that in addition to just having a great tasting breakfast, what the business of hotcakes is really about is feeling loved.  That’s a powerful truth and understanding that can lead to highly effective marketing messages.



What’s the new reality for your product?


With new truths uncovered, a greater more insightful understanding of your audience has been attained.  But now what?

Perhaps the realization has been made that your product does not mean to your market quite what you thought it did.  Maybe it is being used in ways totally unplanned or unanticipated.

The attainment of this knowledge does not mean that a new unalterable course has been charted for your brand.  It just means that there’s a new reality for it.  In honesty, not really a “new” reality – it’s been there all along, but just new to you.

There are now several options to pursue.

You can strengthen the existing direction your product is heading in.  Or, if it is heading straight into the positioning of a much larger competitor, you may want to use the insight to determine how to best motivate the audience to view your product in a more differentiating manner.

Discovery of the new reality for your product is ultimately not about your product, but about gaining the deepest level of insight and understanding about your audience.  Think of it as a mode of calibration.  Once you truly understand the role your product plays in your consumer’s life, then all of the other research and analysis clicks in and makes sense.  From there, it becomes much clearer as to the direction that needs to be taken to achieve specific business goals.

The new reality identified helps wipe away the prejudices you might have that blind you to research suggesting new and innovative platforms to pursue.  It helps clarify what might appear to be inconsistencies between quantitative and qualitative assessments.  It explains motivations that at first glance seemed inconsistent with anticipated product experience.

In short, defining the new reality is the final, missing piece that makes all the work of understanding your market come together.

Leveraging what you’ve learned


So, much work has been done to understand one’s audience.  Much emphasis is placed against this as a holy grail to marketing success.

But what do you do with this insight?  Now comes the truly hard part – standing by your new understanding.

One of the best kept dark secrets about marketing is that many companies don’t really believe in or value marketing.  They say they do, but their actions say differently. Why?  Because companies are run by humans. And by and large humans like to do what they want to do – despite evidence to the contrary.  They lack the discipline and focus to stay with a plan.  They resent being told they were wrong initially and will subconsciously torpedo new efforts to prove that they were indeed right.

If they truly understood and valued marketing, they would overcome their human pre-dispositions.  Because the next step in understanding your market is arguably the most difficult – putting your learning to use. Your new insights must be applied consistently, uniformly and with frequency across the entire spectrum of the company – even in areas that are not considered to be “marketing.”  It must be understood by everyone, believed by everyone and defended when need be.  Without that level of commitment, its chance for success is limited.  And companies find that hard to do.

This consistency is vital not just to ensure a successful marketing initiative, but because this is one of the most vital aspects of understanding a market – putting learning to work.  If they are applied consistently, uniformly and with frequency – and they fail.  Then you have just learned that you misread your market.  If they succeed, well then, a job well done.

But you can’t get that insight unless you properly leverage what you have learned.

Start all over again


Finally, success is at hand.  You have gained breakthrough insights into your market, you have applied these lessons well and sales are thriving.  The audience analysis initiative has been a big win – but it is not over.

Just as the consumer was taking your product and shaping and shifting it to meet their needs, so too are they doing so with the new platform with which you have  presented it. Not to mention that the consumer needs are constantly changing and new consumers are entering the market.

Understanding the market is a never ending exercise.  It’s a moving target that is organic in nature.  It’s not that such an audience can never be truly understood, it’s that you need to keep in step with it.

What’s important is that now you have an accurate baseline from which to compare and judge shifts and evolutions in consumer perceptions.  You have a starting point that you know to be true – so you can measure against it for continued accurate assessments.

In addition, you now have a process.  Measurements can only come when you have a process that is reliable and repeatable.  Such a model provides a dependability from which you can gain consistent results.

Understanding the market requires a constant effort of probing, questioning, reassessing, application and introduction of thoughts into the market to see what will become of them.  In fact, how positions and platforms are received and then manipulated are good indicators of how the market itself is evolving – an early radar system in effect.

The best product or service in the world will find great difficulty in succeeding if the market it is intended for is not understood.  This doesn’t mean the market dictating what you should do – but understanding what they are about.

The acknowledged marketing genius of the decade – Steve Jobs – was famous for dispensing with focus groups. His view was it was not the consumer’s job to know what he or she wanted.  That was his job.  He was right, but not because he ignored the market, but because he understood it better than any other of his generation.

How do you do it so effectively?


Entertainment has the unique advantage of 50 years in the business of providing discounts and promotions, working with both consumers who are looking to save and retailers who are looking to increase their business through customer acquisition initiatives.

Our ability to implement the type of approach described in understanding our market is really a function of commitment to listening, engaging with, analyzing and working on the ground floor with both groups.

We conduct traditional research, but our extensive network of regional reps are able to meet with merchants in their markets to hear their needs and tailor programs specifically to match them.  Our interaction with consumers ranges from an active call center to social media platforms to speaking with them directly.  Backed by demographic research, we are able to glean a very complete picture of our consumers and their lives.

But it is a genuine commitment to observing and responding that ultimately makes our efforts to understand the market highly effective.


Case study

Merchants Go Mobile with Entertainment


Background: At Entertainment Promotions (www.entertainment.com), there are several audiences that are vital for the Company to listen to and constantly keep a pulse on in order to stay relevant for each respective audience.  Not only are audience insights gleaned from the end-consumer who purchases the products; but also from audiences such as the merchants who partner with Entertainment to supply offers that will generate business for them.  This case study will examine the merchant audience.

Issue: In the Fall of 2011, Entertainment launched a mobile coupon app that allowed consumers to use their Smartphone to redeem coupons at participating merchants.  The merchant sales and marketing team was tasked at educating almost 70,000 merchants on this new feature and to up-sell them to make their offer available via mobile in less than 9 months.  At beginning of 2011, consumer Smartphone adoption was around 30% and while there was a lot of industry talk about mobile coupons, the majority of merchants had not started accepting these types of offers.

Indirect and informal feedback from the sales force had suggested that merchants would be hesitant and even resistant to provide a coupon offer in a mobile format.  If merchants were truly resistant to going mobile, this presented significant challenges that needed to be overcome in order to implement mobile strategies.

To really understand the business that we’re in with local merchants and how it impacts others, marketing management went on a series of ride-alongs with the sales force in order to have meaningful discussions with those merchants who are partnering or considering partnering with Entertainment Promotions.  This is truly the B2B version of getting behind the sales counter of a retail outlet.  It is crucial to talk directly to these business owners and decision makers to hear their feelings and feedback first hand.

Talking openly to merchants reaffirmed the value Entertainment provides to the merchants, which is attracting customers to their business.  Merchants revealed this value we bring is being enhanced by ability of Entertainment to attract a quality audience they desired.  A unique benefit that Entertainment was fulfilling was doing this all at little or no cost to the merchant, as most traditional advertising comes at some out-of-pocket cost.  It seemed that a mobile coupon would still meet the need that these businesses were seeking and the benefits we were providing them, so why the hesitation with mobile coupons?  When talking directly to the business owners, it was initially revealed that some merchants were actually receptive and interested in mobile coupons.  Others were simply were unfamiliar with how it worked and needed to have a more thorough understanding of what a mobile coupon is and how it works.  Yet others had a decent understanding but had concerns mobile coupons could be prone to fraud or reused multiple times when the intention is a one-time use to attract new customers.  It was apparent that as consumer Smartphone adoption was growing (reaching a 50% by end of 2011), so too was the mindset of our merchants.  Receptivity by our merchants to accept mobile coupons was beginning to shift from when the sales force had their initial conversations.

These impacts as well as qualitative feedback from the merchant audience was all taken into consideration to develop a formal marketing research project to quantify and measure merchant sentiment about mobile coupons.  Initial informal feedback from the sales force suggested that merchants weren’t ready for mobile coupons, yet marketing management’s interactions with merchants a few months later implied a greater acceptance of going mobile.  This is where a quantitative approach proved essential to size the issue and hence a statistically sound online survey methodology was administered to a representative sample of the merchant audience.  As it turned out, only about one-quarter of merchants wouldn’t consider offering a mobile coupon through Entertainment.  This validated and quantified some of the discussions that occurred during the ride-alongs.  Three-quarters of the merchants were open to the possibility of providing a mobile coupon through Entertainment Promotions.  Among the one-quarter of merchants who were not interested in mobile coupons, the top reasons proved to be fraud concerns and lack of knowledge about mobile coupons.  And by examining business demographics (also known as firmagraphics) it was revealed that certain categories of businesses, such as some service-related business and Retailers, weren’t interested because mobile coupons simply do not fit with their business models.

The new reality for our mobile product was that most merchants were receptive to this technology, dispelling the prejudice in which many thought would be a major obstacle to overcome with the merchant audience.

By understanding the concerns of merchants who were hesitant to adopt the technology, we were able to leverage what was learned to overcome those objectives by making some product enhancements and communicate to merchants through marketing material, marketing campaigns, and sales presentations.  For example, several additional security features were implemented to insure the mobile coupons could only be used once and not duplicated.  This included creating the ability for the merchant to validate via phone the unique coupon ID displayed on each mobile coupon as well as the type of reporting we would provide merchants on a regular basis.  Furthermore, marketing and educational material was developed to highlight these security features.

The outcome of all these efforts has lead to merchants widely accepting the use of mobile coupons as part of their marketing mix in partnering with Entertainment Promotions (www.entertainment.com).  In fact, the majority of existing merchants that participate in the Entertainment Promotion Network make their offers available via mobile.

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