Tuesday, November 06, 2007

The Market Gap

Understanding the Market Gap is what comprises our capacity for long-term success and continued growth.

[This is a simple post about a very complex issue, but for those of you who understand marketing, innovation, differentiation--these sorts of issues-- will have no problem reading between the lines and filling in your own gaps.]

At the beginning of each project, we ask ourselves these questions:

1) Where is there a gap in the market?
2) How do we fill that gap, and furthermore, how do we differentiate within that gap?

In a greater sense it's about differentiation, but that in itself is nothing but a meaningless term-- as are many marketing principles. The key to the solution of solving this particular Market Gap was easy.

The market as a whole is comprised of two distinct tracks. The first track is comprised of the Chains--the Starbucks, Tully's, Caribou, Dunkin' Donuts, etc. of the world. The second track consists of Those Who Insist They Are Different (but really aren't) the "Indies". Most of the independents are a rehashing of the Starbucks menu--including sizing, blended frappa-crappa drinks and the like. The only difference is an insistence of better product but a result of greater inconsistency.

Where's the Gap? Quality.

What's our differentiation within the Gap? One cup at a time. And a relentless and continuous pursuit of Knowledge of Quality and its immediate implementation.

For our purposes, Quality can be defined as, "Sourcing quality ingredients, utilizing quality knowledge and training, and producing a quality product every time." This is a standard held by many top caffe, top restaurants, and other top businesses.
There are differences in each company's level of knowledge as to the answers to these questions:

* Within our industry, what is the standard of quality?

* Is our standard of quality higher, lower, or on par with the industry?

* What empirical proof do we have of our standard?

* Does the market dictate our standard or do we dictate our standard?

* Does our level of standard stay the same (i.e. repackaging old as new)?

* Does our level of standard lower in order to cater to the Lowest Common Denominator?

* Does our level of standard continuously change as our Knowledge of Quality changes?

It is this final question and a resulting answer of "yes" that leads us to the heart of our differentiation, and this does not only apply to us, but to every business that pushes itself to the forefront and quietly leads by an aggressive qualitative approach rather than an aggressive quantitative approach.

(in our case) Whether it's an espresso, or a cup of single origin siphon coffee, or a latte, or a hot tea, or an iced tea, or a bubble tea, or a chai, etc. it's all by the cup. No bulk drip coffee. Everything is by the cup.

Of course this approach puts us as a sliver within the Gap, but with deep penetration. But the main factor that gives us certainty of long term viability is a continuous search for knowledge and its immediate implementation. This is a concept which extends to our other pursuits as well and will be clear in our future endeavors.

Ask yourself these questions?

* How can we make our X better?
With our example, X can be (our espresso, our coffee roasting, our tea containers, our store layout, our internal marketing, our external marketing, our hot chocolate, our bubble tea, our gelato, etc.

* What can we learn from the best in the field (in terms of Quality)?
Know who the top players in your field are and study what they are doing. Pick their brain, speak their language, and break down their years of knowledge into months of hard work.

* What can we do to improve upon what they are doing?

* What is the best thing they do? Can we do it? Can we improve it?

* What is the second best thing they do?...

* What new thing can I learn today?

Whether you learn about proper heel placement and body-weight shifting during a tenkan kotegaeshi, the perfect sesame cold noodle, how to train your dog, the difference between coffee A at temperature X vs. temperature Y, the best day to water your flower garden, etc. The more you know, the more you are exposed to, the more you understand, the more your mind can relate things together that are seemingly unrelatable. Genius and inspiration often occur when we least expect it. It is when are minds are at rest that everything can come together. So while you're not thinking about much, there's sure to be a lot stirring around in that head of yours. But if there's nothing in the pot, all you'll end up with is a wet spoon.

Understand the Market Gap for YOUR particular industry, and how you answer that question will be the defining concept of your entire business. Do it right knowing that improvement by innovation and quality will always lead to long term success.

No comments: