Power Direct Marketing: The Book
The Nine-Box Matrix
You may recall from your university days and Marketing 101 the simple Nine-Box Matrix. If you, like me, need a memory jogger, here is the graphic.
Markets are read horizontally—products vertically. So a new product aimed at a new market is in box #3. An existing product directed toward an expanded market is in box #4. A modified product at an existing market is in box #8.
A key element in setting good objectives is to determine for each of the various products, product lines, and services you offer, in which box of the matrix that particular offer fits.
The primary reason you set objectives is to have some focus and direction. The thought being that that will translate into sales—and PROFITS!
Different products and services at different stages of their life cycle have different opportunities in the marketplace. If they have been around awhile, are a commodity item, are in a mature stage, and/or have intense competition, this product offers you much less opportunity for increased profit.
On the other hand, a new product, or an enhanced product, or an opening in a new market, either by geography or type of audience, may offer you greatly increased sales and profit options.
The Nine-Box Matrix raises such questions as:
- What do we make that could be modified to become another product?
- Can we modify our products to make them work better in new applications?
- Could we simply reposition a product to serve new markets?
- Is it possible to locate expanded markets for our existing products?
- Is it possible to locate new markets for modified products—bundled or unbundled?
- Are we taking a new product to a new marketplace during our coming year?
- Are we taking a new product to one of our existing marketplaces?
- Could we sell products differently, i.e., by mail-order catalog sales, in addition to the existing channels?
Depending on how you answer the questions that are applicable to your company’s products and services, and depending on where you know your product fits in the Nine-Box Matrix will determine how you set your marketing objectives.
It’s easy to take something new to a new marketplace. The chart is clear, and you set objectives to achieve, a timetable to do so, and a new product introduction budget accordingly.
It’s tougher with existing products/services. Sure, you know what you did last year. And the year before. You also have a feel about the competition—what they’re doing. You have established a position and created an image. You know your awareness levels. You know how to generate interest in what you have to offer. You’ve already invested in educating the marketplace—now all you need to do is SELL THE PRODUCT AT A REASONABLE PROFIT!
And, depending on all the factors mentioned here, you will determine where in the Nine-Box Matrix your objective standards will be set. You will decide how much time and money should be allocated to that product line to achieve your objectives. And what it will be worth to you at the bottom line. How much you can invest to get the return you need and want.
In most cases you will benefit by setting your objectives with the pace of change in mind. In today’s world things move quickly. You need to be flexible to your customers’ and prospects’ wants, desires, and most importantly, NEEDS.
At the same time, using the past-paced market as an "excuse" not to set objectives is just that, an excuse. Don’t fall for that line. Instead, commit to setting objectives and working at making them happen.