Many new and most global brands operate below their market potential. One reason is that many customers have not yet entered the product markets. Even if they have, they may not be aware of the brand or use it due to many reasons. Companies can successfully achieve their market potential by helping customers to enter the markets and remove barriers to purchase and use.
FIGURE 1
GE Healthcare: Lullaby Baby Warmer
FIGURE 2
How GE Lullaby Overcame Barriers to Market Potential
There are seven barriers restricting companies from achieving their market potential as was the case for Lullaby Baby Warmer developed by GE Healthcare shown above.
– UNAFFORDABLE: A product may be unaffordable for prospective or potential customers. This can happen even if current customers find it affordable.
– UNRECOGNIZED NEED: Many potential customers are aware of the products but do not recognize their need for it.
– LACK OF AWARENESS AND COMPREHENSION OF BENEFITS: Potential customers may be unaware of the product’s existence. They may not recognize its value if they do not comprehend its benefits. Often, this occurs for complex and experiential products and intangible services.
– LACK OF DESIRED PERFORMANCE: A product cannot reach its market potential if its benefits do not appeal to consumers. In many cases, customers do not desire greater performance but rather the appropriate performance level to satisfy their needs.
– LACK OF SKILLS: Potential consumers may lack the requisite skills to use a product or service. Companies can fund education or training programs for potential and current consumers. They can also simply their offering to make fewer skills required to use them.
– INSUFFICIENT INFRASTRUCTURE: Infrastructure, such as roads for automobiles, highspeed internet for movie streaming services, electric chargers for cars, and wireless connectivity for cellphones, is required for most products and services market growth.
– UNAVAILABILITY: Demand is hampered if products are in short supply, distribution difficulties arise, or support services are inadequate. The 2020 COVID-19 pandemic severely disrupted supply chains, limiting the availability of cleaning and sanitizing products.
To achieve their market potential, companies must diligently work to overcome these seven barriers. GE Healthcare is a successful company that overcame these seven barriers in India to achieve blockbuster sales of its core product, the GE Lullaby Warmer. GE’s efforts to overcome the market potential barriers are shown in Figure 2.
As described in Figure 2, GE Healthcare overcame several barriers by redesigning its baby warmer to be simpler and less expensive removing the barrier of unaffordability and lack of desired performance. GE’s salesforce visited customers in rural hospitals to remove the barriers lack of awareness unrecognized needs. It started a production facility in India to remove the barrier of unavailability. To address the barrier of lack of skills among users, GE
redesigned the baby warmer so that nurses did not require literacy in English. Eventually, GE succeeded by selling the product not just in India, but also in many neighboring countries.
CONCLUSION: Overcoming barriers to achieving market potential requires a comprehensive approach to understand the barriers, and carefully design solutions to address them. If properly addressed, they can enable firms to satisfy customers while increasing both sales and margins.
Learn more about product positioning in Chapter 5 of Market-Based Management (7th edition). Chapter 1 can be reviewed online at www.mbm-book.com.
References:
- Bang, Vasant V., Sharad L. Joshi, and Monica C. Singh (2016), “Marketing strategy in emerging markets: a conceptual framework,” Journal of Strategic Marketing, 24(2), 104–117.
- Anthony, S.D., M.W. Johnson, J.V. Sinfield, and E.J. Altman (2008), Innovator’s Guide to Growth—Putting Disruptive Innovation to Work. Cambridge, MA: Harvard Business School Press.