How to find your niche market in the printing business ? – Blue / red ocean.
More and more often we get questions from our customers, what products are best to sell on the Internet. Years of work in printing business and the experience gained from our customers lead us to some conclusions.
Prepare the appropriate strategy
One of the methods that simplify finding the right market for your products is the strategy of the blue and red ocean. It was first described in the Chan Kims and Renée Mauborgnes book “blue ocean strategy” in 2005. The main objective of their methodology is to divide markets considering the competition and entry barriers.
Blue ocean market is a market where there is no competition or competition is not enough to meet consumer demand. You can find such a market or create it yourself by preparing a new product or service. This is related to creating a new demand for a new unique good. In this case you should assume that the customer will not immediately decide to purchase your good. The introduction of innovations to any market will require you to continuously monitor the activities of potential customers and adapt the product to their expectations. The essential features of this process is patience and speed in action. You must be prepared for a million scenarios. Fundamental will be your ability to observe. Customer behavior on your website, their questions, as well as many other tests in the future will pay off better adaptation of our new product or service to market expectations.
An alternative to running your business in an environment of blue ocean is red ocean. The essence of the red ocean strategy is to compete in markets that are already developed. Therefore, ypu must prepare for constant struggle with competition for already existing demand on the market. Focusing on traditional (existing) customer group will force you to exploit it more. The advantages of such strategy should be that all your forces you can easily use in the fight with competition and customer service, and not, as in the case of the blue ocean in adapting innovation.
Of course manager of each company should independently decide which strategy to choose. Companies operating in the red ocean environment build its market position, and treat other firms from the industry as enemies – the market for them is like a battlefield. On the other hand companies in blue ocean create innovation – instead of competing on the existing market, they create a new one.
To illustrate the above strategy, we will try to find both blue and red ocean for the printing industry.
The first and easiest step to analyze the market is to check the frequency of queries for key phrases in Google. The ideal tool that facilitates this type of study is – Google Keyword Planner.
Red ocean on the printing market
The analysis of the primary keywords for the printing industry shows that phrases on which there is a lot of competition are: “printing leaflets” and “business cards”.
The above picture shows that phrases “leaflets” and “business card” is a phrase often written by the Internet users. High frequency of searches is definitely a tempting indicator. Unfortunately, our competition is also aware of that – indicates the ‘competition’ column. Suggested rate represents the average price-per-click projected for the phrase in the context of a paid Google Adwords advertising campaign in Google Search. You should, therefore, check whether the cost of customer acquisition by this method is cost-effective for your company. For the analysis we advise you to take under consideration the most pessimistic projection.
Let’s assume for example that the conversion of collected traffic to your website will be 1%. That means that, for 100 users of your website only 1 decides to buy. To get 100 users on your website, according to statistics presented to the image, you have to spend 480 euros for the phrase “business card” and 426 euros for the phrase “leaflets.” As you can see it is not cheap. Obviously this is a very basic statistic. Campaigns need to be optimized, then the cost of acquisition will be much lower. This requires work and analysis on a regular basis. The same applies to the selection of key phrases. You should choose more specific phrases. Certainly micro-markets of printing leaflets and business cards can be called a red ocean markets.
Finding the blue ocean
Finding blue ocean is not a simple task. This requires a number of analyzes and studies. For the purposes of this article we will try to find a market resembling blue ocean. For this purpose we use the same method as in the red ocean – Google Keyword Planner.
One of the recent trends among printing companies in Europe is the sale of personalized / customizable cardboard packaging. It works this way that the customer enters on printing house’s website, selects the size of the carton packaging which he wants to order and goes to the online graphic designer. In the graphic designer, the customer can personalize cardboard box, for example by adding a logo, address or other elements. Later the customer places an order. As you can see in the above screen, in Poland the market is still undeveloped.Apart from preparing the system and products you should also take into account the need of creating the demand for it, but it is a subject for the next post on our blog.