“I notice increasing reluctance on the part of marketing executives to use judgement; they are coming to rely too much on research, and they use it as a drunkard uses a lamp post for support, rather than for illumination.” David Oglivy
Our world is in a constant state of flux with the rapid flow of information and increased uptake in technological advancements, and the pace of change continues to increase manifold at mind boggling speed. The increased level of change will result in an increased level of uncertainty in the market place. If these trends are not closely monitored you could find yourself providing a product/service to a market which is slowly becoming extinct. As an entrepreneur this may hit you whilst you are setting up your own business or keeping levels of market risk at a manageable level. Hence you have to keep your finger on the pulse of the industry you operate in, constantly.
These are some tactics we use to manage market risk in the organizations I am involved with :
1. Read voraciously about your industry. Subscribe to industry specific reports, magazines and newsletters to help keep abreast with latest trends. This helps business development divisions to accurately estimate market size as well as being able to create market maps. A market map helps you to segment the industry and provides you with critical data regarding growth opportunities.
2. Meticulously track local and international competitors who are at the beech-head of advancement in your industry. This helps identify growth paths as well as information regarding the competiton’s strenghts and weakness. Accordingly structure growth paths to develop competencies in areas where you can compete most effectively and efficiently.
3. Establish mediums through which you can be in constant touch with your customers, suppliers and retailers. They provide you with ground realities which cannot be measured with extrapolated projection analysis. Constantly monitor consumption, sales and feedback to ensure that your product/service is continuing to provide the value that is expected of it.
The tactics mentioned above may appear simple and logical, yet, many startup organizations venture into spaces where they have not clearly outlined the size of potential markets or gauged whether the product/service they are providing is what the market demands. If you fail to gather data regarding these critical factors you will exponentially increase your venture’s risk level. In the final analysis, the fate of any business lies in its ability to create or provide a product/service that fits the market demands or needs.