Market mapping is a strategy that uses visual aids to organise competitive information, like revenue or growth rate, in order to better understand industry and market trends. Market mapping can be used to identify where your business falls within the market, and inform strategic pivots or direction. As a small business owner, you understand how crucial it is to know where you stand among your competitors. Learning how to market map and implement it into strategic decision-making can help you find what works well for your business.
Learning market mapping and implementing it into strategic decision-making can help you find what works well for your business. With better utilisation of market mapping, you can refocus your attention on key variables efficiently and effectively, allowing you to successfully determine the next steps that will set you apart from the competition.
Read on to learn what market mapping is, how it can contribute to your success, and how the right tools can make the whole process a breeze for a team of any size.
What is market mapping?
A market map is a visual indicator of your business compared to others in the current market. Market mapping is also known as “competitive landscape mapping” or “positional mapping.” Maps are usually indicated on a chart or graph, with the key elements you’re examining on the vertical and horizontal axes.
From product pricing to customer perception, there is a wide range of factors to examine within your business through market mapping. Seeing your current metrics in a visual representation puts you and your competitors into perspective from a kind of “bird’s eye view” of the market, which can help you make better predictions, raise your ROI, and ultimately chart a more successful and stable way forward.
Types of Market Mapping
Typically, there are three main kinds of market maps: one for your competitors, one for your products, and one for your audience.
1. Maps for Competitors
Maps for competitors evaluate other businesses and what separates them from you. These positioning maps should include information about you and your competitors to show a contrast of yearly performance, customer reach, range of products, pricing, and growth rate.
In designing these types of maps, you can also pinpoint areas other businesses have yet to fill that you can offer customers. For example, if you wonder how your business compares to other companies, you might input information comparing your products’ quality and pricing to those of your competitors.
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2. Maps for Products
Maps for products are similar to those for competitors. But as the name suggests, they highlight your products instead. These maps should focus on the pricing and quality of products for you and your competitors as well as special features/contributions to your customers.
These maps are great indicators of how these aspects specifically correlate with each other. For example, do your prices indicate customer expectations around product quality? Do your high prices correlate with your products of higher quality? How are your customers relating low quality with a low price? Perhaps you are offering customers a lower price with a higher quality product as part of a new product development, and you would like to see how your product differs from others currently on the market. All of these are great questions and experiments to take to product maps.
What to learn more? Check out: Your Best Pricing Strategy: 7 Examples to Maximise Your Profits
3. Maps for Audience
A crucial part of your marketing strategy is maps for your customers or audience. These should visualise the range of customers for your products and which ones are vital to you. Information on these maps should include all the basic demographics: age, gender, income, interests, values, location, and purchase frequency.
These maps benefit you in telling you who your best audience is. For example, if you’re an aesthetician, you might map the frequency of salon appointments to your location to see who would most likely be part of your target audience. From there, you could begin framing market segmentation, catering to those specific customers.
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Benefits of Market Mapping
There are many benefits to market mapping, including (but not limited to) estimating future markets, identifying your main competitors, and re-honing market strategies, all of which provide crucial market insights into your business.
1. Estimating future markets.
Market maps can help you predict the future actions of rival businesses. The same goes for both maps of products and audiences—you can better see when things are falling out of popular demand and better predict what will trend next. Anticipating change helps the flexibility and responsiveness of your business in case something within the market does shift.
2. Identifying main competitors.
Market maps can also help you identify new competitors and their market position relative to yours in a competitive environment. Representing those with similar products or services on a positional map tells you who the biggest threats to your business are. Some competitors might not actually be the big businesses you often think about but smaller companies flying under your radar that you don’t see until you plug the information into a market map.
3. Re-honing market strategies.
By visualising your ranking within your industry, you can brainstorm new business strategies with the information you glean from your market maps. Identifying your customers better prepares you to cater to their wants and needs. Visualising where your competitors stand helps you readjust to what you need to do to distinguish your business from competitors.
These maps can also highlight potential partnering opportunities for further market segmentation. Businesses with different products but similar audiences have the opportunity to possibly work together to cater product offerings no other competitors are developing to a specific customer segment.
How to Create a Market Map
So, how do you begin creating your market or positioning map? You can start this process in multiple ways, focusing on different metrics with each map. Here are a few tips to get started:
1. Define your market.
To begin, what are the specific parameters of your market? To better understand your market positioning within a specific area, you need to narrow down your target market so that you can deal solely with the information most crucial to your business. Of course, you can always create different positioning maps for different elements if you’re worried you’ll miss something important, but really your maps should just align with what is most relevant to your customers, competitors, and area of reach.
2. Identify your business’s differences.
Identifying the unique elements that make your company stand out from competitors can simplify the market mapping process from the beginning. Narrowing the scope of things you want to compare between you and your competitors can also make market mapping less overwhelming.
3. Research your competitors and audience.
To better map your market, you need to conduct thorough market research. This includes performing customer surveys, pouring over reviews, and taking the time to sift through marketing data analytics to understand where you and your products stand compared to the guys down the street. Rival businesses typically have their reports publicly available, making it easier for you to gather these insights. Because data points like these determine the results of your market maps, gathering these plot points is the most important part of visualizing your current standing.
What to learn more? Check out: How to create a customer survey.
4. Establish your market share.
To determine your market share, input the information from each company and product you’re including on the graph. In measuring market shares, you can plot the graph to correlate market share with price ranges to discover what your business can individually offer. You can also compare market share with your audience analytics to determine your target customer and audiences.
5. Map your results.
Finally, make a graph of any related aspects you want to focus on. For example, you can compare price with quality, market share, location, or even age. (Remember, results will probably differ if you compare quality with age, location, or market share.) Repeat the research process periodically and always input current information to maintain a continuous visual representation of how your business is performing.
Ultimately, this market analysis will constitute a visual progression that will help you see both your and your competitors’ transitions in and out of market trends, audience changes, and market shares. These graphs will help you to identify what needs further examination in and outside of your business. Understandably, current market maps are crucial to staying one step ahead of the competition, so it’s important to continue updating them.
Example of Market Mapping
A visual tool needs to be seen, not just heard. Here’s a basic template to start from for market mapping:
While this template is a just simple indicator of a new market a business like yours might be part of, observe how easy market mapping makes understanding your company’s position. In this example—where you’re hypothetically focusing on both quality and pricing among you and your competitors—you’re easily able to see that your product offers customers the best price for a higher quality than the majority of the other guys. Congrats!
You’re also able to identify your top competitor and see what sets them apart from you. AKA, you offer a better price, but Competitor One has a slightly higher quality product. From here, you might gather audience information and create another market map to see how they perform compared to your business and then determine the next course of action your brand should take. Wash, rinse, repeat.
Stand Out From the Competition
Well done–you now have everything you need to set yourself up for future market mapping success. Of course, these tips are just a few of the many ways you can work to distinguish yourself from your competitors and get a corner in your industry. As the marketplace evolves, there are an increasing number of ways to spotlight your business in a sea of competitors.
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