The key challenges associated with entering a new B2B market are not as obvious as they may seem. Yes, you need a killer product or service that fits perfectly with the need of the marketplace but image, relationship and your people are also key. We consider the key B2B new market entry challenges and suggest some potential solutions.
As one of the four routes to business growth covered in Ansoffs matrix the benefits of penetrating a new market are clear but to be a success requires:
- A solid strategy.
- A product / service the specifically addresses the needs of the market place.
- The resources to implement the strategy.
- The right people, signed up and committed to the cause.
Even with all the above in place there is a problem. It is almost certain there will be entrenched competition in the new market. The influence of their existing relationships with key decision makers and their standing in the marketplace should not be underestimated. People buy from people and there is always an issue of trust that any new supplier to a marketplace must overcome.
Entering any new market is a challenge but given it is one of the main routes to increased sales and growth it is a challenge that must be overcome. That said to try to enter a new market and fail wastes considerable resources and in some cases can be catastrophic for a business.
Each potential new market opportunity should be subjected to an initial screening process before diving in to a more thorough analysis. If the analysis shows there is an opportunity then a solid strategic plan that considers all possible scenarios, risks and resources is required before any attempt is made to move forward.
Assuming you have answered the key marketing questions surrounding your offer and the new market, stated your assumptions, identified risk, truthfully analysed your limitations and built your go to market plan then it is time to address people, relationship and image issues.
Who Will Deliver The Plan
Any strategy and plan is useless unless it is communicated appropriately to those tasked with making it happen, they understand it, are committed to it and are motivated to take it forward. In general people are resistant to change and with many years working in a particular market sector that they understand and are comfortable with may be resistant to stepping outside their comfort zone.
It is important to outline to all company personnel:
- The reasons for attacking the new market.
- The opportunity for the business and all those involved it represents.
- The risks associated with simply focussing on existing markets.
- An overview of the characteristics of the new market.
- An outline of the strategic plan and timescales.
To overcome objections, address reluctance to change and secure sign up from all those involved. Not everyone will sign up, there will still be doubters, and strong leadership is required to ensure they are marginalised (or removed) so they do not destabilize the rest. New skills may be required or it may be necessary to hire those with some existing expertise in the new market.
Overcoming Entrenched Relationships
Any new market will have entrenched competition, often with many years’ experience of the market, a presence and a level of trust and existing relationships with the key decision makers. Any competitor with high levels of customer service, reasonable pricing and a progressive attitude to new products and solutions will be difficult to dislodge and all that can be done is to nibble away at their second tier accounts while building awareness in their key accounts.
The focus should therefore be on competitors that have an issue with service, pricing, new products or have become complacent. A focus on pricing should be lowest on the priority list but in any marketplace there will be the opportunity to attack on service and complacency. Potential customers will always be receptive to new solutions that address their needs.
To overcome existing relationship and market presence issues it is often best to attack new markets where the business already has some presence in the key customers, perhaps supplying minor items at a relatively low level. If this is not possible then finding a suitable partner (particularly a sales organisation) with existing access to key decision makers if often the key to success.
New market entry in B2B markets then is always a challenge but assuming the potential is researched appropriately, a strong plan is in place and the business has its key people on-board there will always be potential opportunities where entrenched competitors drop the ball.