Identifying Industry Attractiveness for B2B Product Management

Product Management is one of the most versatile roles in the industry, and product managers usually find themselves at a cross-section where they are expected to wear multiple hats at the same time. These are the moments when having a few tools handy can give them the confidence to position their work effectively.

As a product manager, I usually see situations here B2B sales teams are looking for credible propositions to discuss with customers but are not able to capture enough market intelligence from customers. In such situations, it becomes imperative for product managers to walk the extra mile and understand the industry segment of the customer through secondary sources. However, usually, after such analysis product managers find themselves with lots of information, and without any framework to organize this information they are not able to define any actionable items from the same.

Over the years after facing such challenges, I devised a six-dimensional framework that I call “Market Attractiveness Hexagon” to define the attractiveness of an industry for a product or proposition effort and put the information captured during market analysis in perspective.

The definition of Product I am going to consider is from the book “Build Trap” by Melissa Perri:

“Products are the vehicle of Value, and deliver value repeatedly to customers and users, without requiring the company to build something new every time.”

Industry/Market Attractiveness Hexagon

Market Depth: According to the definition Products are not ephemeral in nature, and so the market they serve should also not be ephemeral in nature. One dimension of repeatability of the market is the depth of organization building products in the market segment. If an organization has reached multiple potential customers, then there is potential to deliver the product repeatedly to customers.

Industry/Market Experience: In sports, we often observe that players perform best at their home turf. Although all sports arena is built under professional supervision and under similar guidelines, which removes subjectivity, however, there are still finer aspects that are unique to every ground. This uniqueness arises from familiarity and gives an upper edge, however minor, to players playing on their home turf. The same is the case in business, and the experience of serving an industry segment provides a competitive edge to an organization that can become an ultimate competitive advantage.

Market Size: One thing that directly relates to the attractiveness of an industry is the potential market size. Many times the market size numbers are not easy to get from secondary research, and product managers might have to rely upon secondary data many times. In such a scenario a fair idea about the overall market size and future trends can help in arriving at the potential rating of market attractiveness in terms of market size.

Criticality for customers: Criticality is a function of how customers react if the product stops delivering the expected value to customers. The value delivered can be quantifiable or can be experiential in nature. For example, the break-down of an elevator can be critical for customers as it has an impact on the experience delivered, while the failure of the boiler can have a direct impact on the financial viability of the business.

Market State: Market state is described as how consolidated or fragmented the market is. If your product is serving a highly consolidated market, then the potential of new product penetration is low, and the product must deliver a significantly high-value proposition to enable incumbents to get a competitive advantage and win differentiation in the market. On the other hand, achieving market penetration in a consolidated market can provide an opportunity for windfall gains due to the size of customers.

RoI: Clear mapping of client RoI with the product value proposition can give an edge for the winning market, and gain customers. The better the visibility of factors impacting RoI for customers, the better the chances of identifying potential value additive impact of product for the customer.

These six dimensions can be defined on a 5 pointer scale and be plotted as a scatter plot to do relative comparison while defining the focus vertical for your organization while making product roadmap decisions. One sample “Market Attractiveness Hexagon” is provided below for reference.