RTM: Do you think that companies have become more sophisticated about marketing and channels-to-market in the last ten years?

MM: Oh yes, definitely.  But I still find that most board-level executives can’t answer some fairly simple questions.

RTM: Such as?

MM: Well, one of the first things I always ask is what are their key target markets, in order of priority?  In response, people almost always start talking about their products, rather than the needs that they fulfil.  This, of course, is a nonsense.

There is no such thing as a pensions market.  There is, however, a market for long-term saving for retirement and that demand can be satisfied in a dozen different ways, apart from taking out a pension.

Products don’t make markets – consumers do. And companies that confuse the two are at great risk. IBM nearly went bankrupt because it thought it was in the mainframe market. Gestetner thought it was in the duplicator market.

RTM: What do you ask next?

MM: What are your sources of differential advantage in each of these markets? Typically, people don’t have the answer to that either.

RTM: So how do you approach channels-to-market?

MM: Well, having explored the real markets they are in, I ask companies to draw a market map, showing the flow of goods and services to the end-user in each market, and showing the junctions such as intermediaries.

This should also identify important influencers, such as architects, who buy practically nothing but have a huge role in specifying what products are purchased. 

RTM: And can most companies do this?

“Most board-level executives can’t answer some fairly simple questions.”

MM: I would say typically, no.  They find it very hard to measure the size of the flows going through the different junctions.   They often haven’t identified the real influencers in each market.  Often, they don’t know how much of their own sales flow goes through each junction. So this exercise often sparks small market research projects.

RTM: And at the end of that they have two maps – one showing their own marketing map and one showing the map for the entire market.

MM: Yes. And then we can start to look at the differences, and why they exist. The next step is to produce a map of what the market will look like in five years’ time. That is when things get really interesting!

RTM: Hmm, it is a bit of a top-down approach. Don’t you need to analyse the needs of the consumer and consider the experience you want to offer before designing routes to market?