Market Like An Insurgent Part II - Know Your Terrain

Understand The Topography And The Dynamics Affecting The Landscape

By David Miranda

Part I - Know Your Adversary, showcased the requirement to understand an adversary - who they are, their leadership, resources, organization, culture, strengths and vulnerabilities, etc. This provides a predictive indication on how they will react to market and competitive opportunities and threats, i.e. where the Achilles Heels are.

Knowing the terrain (or playing field) is also critical for successful marketing insurgency. This is referred to as the business ecosystem, i.e. key players, target audiences, channels of distribution, interrelationships, pricing and cost structures, barriers to entry, seasonality, and regulatory guidelines.

Key Players - Identify and study the incumbents. (See Part I - Know Your Adversary). Typically their attention is elsewhere, i.e. dealing with bureaucracy, eyeing major competitors, becoming more risk averse, embracing the status quo. This where insurgents have a clear advantage operating stealthly under the radar screen of scrutiny.

Target Audiences - Identify who the primary, secondary, and tertiary target audiences are of the incumbents. Chances are their are pockets of underserved, undersatisfied, underappreciated consumers that are vulnerable to a better, faster, cheaper alternatives.

Channels Of Distribution - How do incumbents distribute their products/services to customers? Is there a more cost efficient and effective solution? Sam Walton, for example, determined he could offer "everyday low prices" by eliminating the middleman, the wholesale distribution channels employed for years by incumbents. He reinvented the ecosystem for retail at the expense of incumbents.

Interrelationships - Incumbents benefit by the interrelationships they have developed over time with their consumer base, vendors, media, etc. It is imperative to understand these relationships. These relationships represent a potentially powerful force that can be brought to bear on insurgents. The most obvious are trade associations funded by incumbents that lobby the consumer and trade press and the government to increase barrier to entry.

Pricing & Cost Structures - Incumbents, generally, have a major advantage over insurgents - economies of scale and financial reserves. Incumbents are wise to pick a fight they can win. A full frontal assault of an incumbent can cause devastating consequences. They can lower prices for a sustainable period or unleash a powerful counterattack to overwhelm an insurgent. Price to gain market share quickly, but not at the expense of losing money on each sale. It is not sustainable.

Barriers To Entry - The two biggest barriers to entry are sufficient capital and time. Not enough capital or too long to market are each, in themselves, problematic. Together they are fatal.

Seasonality - Study the seasonality and business cycle of the business ecosystem. Typically incumbents have a predictable behavior in their marketing plans, i.e. they are aggressive during periods of high demand and are more passive during periods of weak demand. Insurgents must be aggressive during the weak periods and not attempt to go toe-to-toe when the incumbents are "feeding".

Regulatory Guidelines - Some verticals must operate within government regulatory guidelines, i.e. telecommunications, financial services, etc. An insurgent must understand the regulatory landscape or be thwarted by incumbents.

Market Like An Insurgent Part III - Planning The Insurgency