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Market Segmentation

Market Segmentation. Robin Purohit VP of Product Management VERITAS Software. Who am I. 13 years experience as developer, architect, strategic planner, PM Telecommunication, Enterprise Computing, Networking, Storage HW and SW 4 years @ VERITAS as PM Currently manage 75 person PM org

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Market Segmentation

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  1. Market Segmentation Robin Purohit VP of Product Management VERITAS Software

  2. Who am I • 13 years experience as developer, architect, strategic planner, PM • Telecommunication, Enterprise Computing, Networking, Storage HW and SW • 4 years @ VERITAS as PM • Currently manage 75 person PM org • Planning • Cross-functional Program Management • Technical Marketing

  3. Product Management at VERITAS • 4 year transition from • Evangelism to business leaders • No process to formal Product Life Cycle • Technology focus to market focus • Reporting to engineering to company function • Yes, we’re hiring

  4. Market Segmentation & Business Planning • Brings focus to complex, data-rich problem • Ensures a customer-centric view of business opportunity and strategy • Clearly maps our targets by • Common customer characteristics • Channels • Competitive Landscape • Invaluable throughout the product lifecycle • Prioritize development • Choosing Partners • Marketing Messages • Pricing • Sales Training

  5. Market SegmentationCommon Pitfalls • Inwards Looking:Segmenting by Product Offering • Relying on 3rd Parties:Using Industry Analyst Segmentation • Treating Segmentation as Static:Being unaware of changing market conditions • Public Communication:Telling the press, partners how clever you are

  6. Market SegmentationBest Practices – Robin’s View • Assess the Market Stage • Develop a strawman with secondary research • Dispassionate primary research • Let a customer centric segmentation reveal itself • Determine most attractive attack points by knowing who you are • Validate with analysts,x-functional team ….Ideally before significant R&D investment

  7. Assesssing the Market StageUsing a Market Life Cycle Model Market Creation Mkt Development Mkt Exploitation Market Sustaining Market Exit Early Adopter Mature(Sustaining) Early Mainstream(Market Intro) Mainstream(Growth) Decline(EOL) ? Where is the general market ? What market dynamics create new opportunities

  8. Assesssing the Market StageFibre Channel Storage & 3COM circa 1997 Market Creation Mkt Development Mkt Exploitation Market Sustaining Market Exit Early Adopter Mature(Sustaining) Early Mainstream(Market Intro) Mainstream(Growth) Decline(EOL) Internal SCSIStorage • Storage Densities • Media Rich Applications • Data Explosion External Storage Serial Storage Internal Extended SCSI Storage NetworkedStorage

  9. Strawman SegmentationFC Propositions • Sources to develop strawman • Industry groups • Peer discussions • Technical press • Early Adopters within Video Production/Broadcast • Strawman Market Segments within Enterprise Universe of Customers • “Data Sharing” • “Shared Consolidation’ • “LAN-Free Backup”

  10. What the Research Revealed • Process: • Mediated blind focus groups to develop impartial view • Not extensive : 8 cities provided enough to develop an intuitive view of the market • Results • Mainstream Market in infancy of education • LAN-Free Backup was only compelling reason to buy • Skepticism buying solution from a network vendor • Competitors highly fragmented and lacking credibility

  11. Self-AssessmentNew Market, No Credibility • Internal soul-searching and executive interviews • Where is the company’s strengths? • Where is the company going? • What is the sense of urgency to develop a new market? • Is this a sufficient new economy to be worthwhile • Conclusions • Solutions delivery to create value • Develop new storage industry partnerships • Evangelize & educate to software vendors • Pre-mature for primary high volume channel • OEM best fit • Recruit a small highly set of new storage savvy VARS/OEMs • Aggressive M&A exploration to acquire credibility • Multi-100M$ product opportunity with first strike potential • Strong brand could accelerate customer interest

  12. Refined SegmentationOEM Channel • Through direct discussions with OEM prospects • PC Server • UNIX Server • Enterprise Storage • Disk Drive • Challenge • Existing OEM channel served PC Servers, butUNIX and Enterprise storage were critical • Primary focus on PC Server • Identify VAR based solutions providers with UNIX/Storage

  13. Market AttackPricing Dynamic & Strategy Refinement Market Creation Mkt Development Mkt Exploitation Market Sustaining Market Exit Early Adopter Mature(Sustaining) Early Mainstream(Market Intro) Mainstream(Growth) Decline(EOL) License technology ASAP to build market Recruit Solution Partners forLAN Free Backup NetworkedStorage Price Insensitive Serial Storage Pursue significant M&A to acquirebest technology vendors OEM Price Sensitive

  14. How did the market play out?3COM imploded, but…. Market Creation Mkt Development Mkt Exploitation Market Sustaining Market Exit Early Adopter Mature(Sustaining) Early Mainstream(Market Intro) Mainstream(Growth) Decline(EOL) Storage Network Infrastructure Enterprise RAID/UNIX Packaged solutions LAN Free Backup • New Threats in 2002 • IP-Storage • Hybrid devices Internal Disk

  15. How to use Segmentation acrossMarket Life Cycle Model Market Creation Mkt Development Mkt Exploitation Market Sustaining Market Exit Early Adopter Mature(Sustaining) Early Mainstream(Market Intro) Mainstream(Growth) Decline(EOL) Re-segment to : - exploit niches if you lost (compete on price) - identify untapped value and customers (premium price) “Tornado Phase” Identify compelling reason to buyone vertical at a time(price as part of solution costs) Throw out the segmentationand chase the money(price to win) Identify valueone customer at a time(price high to cover costs)

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