One of the main reasons clients reach out to Porchlight is our industry knowledge, which comes in handy for brands entering the home improvement market. As home improvement continues to outperform other retail sectors, more and more products are seeking inroads. And smart brands know that entering a new market requires strategy.
While there are many reasons to consider market expansion – a new target audience, retailer or territory – success hinges on one thing: effective positioning. To succeed in a new market, your positioning strategy must fit the market. There are no shortcuts here. To assume that what works in one market will work in another is a mistake. In most cases, success is non-transferrable. That said, rarely does it require a complete overhaul either. Often, strategic realignment is all that is needed to create the right fit.
Positioning an existing product for a new market is often achieved by tweaking key messaging and visuals. This sounds simple enough, but the devil is in the details. It requires an understanding of, and appreciation for, the subtleties contained in the new market. Two markets may appear similar but act differently. Likewise, seemingly similar audiences can have very different needs, lifestyles, buying preferences and purchase triggers.
To demonstrate how even the smallest variations between markets can impact positioning, we’ve outlined two textbook examples of new market strategies below.
Positioning for a new or expanded demographic market
There are many different reasons you might want to target a new or expanded demographic. For starters, you may have an overly broad consumer base which hasn’t produced the ROI you want. In that case, you might be considering specialized marketing to access greater yield. Consider the potential that demographics has on marketing strategy for a touchless entry product.
Suppose you are the marketing manager for a touchless keypad product for residential homes. Your target audience is homeowners, but after a few years of slow growth, you’ve decided to segment that audience. Research confirms your segmentation. Data indicates that millennial homeowners and Gen X homeowners have very different lifestyles, which means that they have different preferences and needs when it comes to your product.
Millennials want the latest technology and the freedom of keyless entry. Meanwhile, older homeowners care less about the tech or about a keyless lifestyle. They’re more concerned with balancing security while allowing entry to a diverse group of users, such as kids, caregivers, contractors and neighbors.
These insights have big ramifications for your brand. They reveal that different audiences will likely respond to different messages. The hierarchy of value propositions and key messages will be different when you speak to millennial vs. Gen X shoppers. More than likely, these messaging variations won’t require major investments in branding or POP within retailers. These audiences aren’t buying differently, they’re simply activated differently, which means that segmented advertising can move the needle.
But suppose you sell your product in different retailer markets, such as Best Buy and The Home Depot. These retailers do attract different audiences. They may even segment along the generational line in some areas. In this case, the variation in shoppers might justify changes in packaging. The POP will certainly be different.
Positioning to a new or expanded geographic market
There are an equal variety of reasons brands decide to enter a new territory. This is one of the leading reasons for segmented marketing. This is particularly frequent in the home improvement industry where regional brands have a product that is successful in a particular market but struggles to match that success in other regions. Consider the potential that geography has on marketing strategy for a composite decking product.
Suppose you are the marketing manager for a composite decking company. Your target audience is socially conscious, middle-to-upper-income homeowners who are investing in their outdoor living spaces. Again, this is a broad demographic, but it’s more refined than the previous example. Still, your success on the West Coast hasn’t been matched on the East Coast. So, how do we drill in and move the needle? We start by recognizing the obvious: What works in one part of the country will not necessarily work in another. Different regions can have dramatic variations in climate, building codes and preferences. From region to region, shoppers can have a different definition of value.
Out west, your product is known for being noncombustible and sells well in rural areas where wildfire events are common. Meanwhile, along the East Coast, sales have been sluggish. It’s not hard to recognize that weather conditions, seasons and architectural styles change from coast to coast. On the East Coast, homeowners are looking for a product that can withstand exposure to wet weather and insects. They want a framing system that is hurricane-rated. They even have alternative aesthetic preferences. After all, disparate regions are exposed to distinct architectural and natural environments, which influence styles.
Even though these homeowners have a lot in common – income, interests, homeownership – when it comes to products, their needs are distinct. In other words, they are likely to respond to different messaging, imagery, visual merchandising and product styles. However, because of their commonalities, they will most likely appreciate the same promotions.
The key with positioning products for new markets is to pay close attention to the nuances that make it unique. This way, you can discern what to keep and what to change. It’s not always a net-new venture to expand into a new market. It can involve simple tweaks as easily as it can big changes. It can require an entire new marketing strategy, or it can be as simple as segmenting your advertising. One thing is for certain: Assumptions rarely pay off. If you’re considering a new market strategy, our team can help.