Growing in Grown-up Markets

This picture is of Martin Cooper making the first cell phone call ever on April 3rd, 1973. This “brick-like” phone weighed 30 ounces. When it was commercialized 10 years later, it still weighed 16 ounces and cost $3,500. For those of you who remember early cell phones they all looked about the same, weighed a fair bit and felt as if they were priced by the ounce.

This is a snapshot of the somewhat bewildering array of sleek cell phones available today on AT&T’s website:

What happened? Why do we have so many cell phone choices today? Some may say that the technology has evolved tremendously and allowed us to do a lot more. But then why don’t we pack all that technology into one phone? Any why is it that some phones, such as re-furbished phones, have nothing to do with technology?

The answer lies in market evolution. In nascent and early-growth markets the products are usually quite similar and get their growth by converting users of previous technologies. As the market matures however, customer’s needs evolve and the market fragments into multiple segments. The marketers who are able to recognize this early enough, segment the market, produce offerings for each of the viable segments and are able to successfully grow even as the market matures. However many companies continue to offer a one-size-fits-all to their customers. This is where they often falter and fail to transition to a new market situation. Ironically it is often the market leaders who have so much invested in the early successes and do not often see the customer needs segment into different clusters.

The trick to growing in grown-up markets is to recognize that there are market opportunities for different types of products that serve multiple customer segments. This knowledge can be just as game-changing as a new technological break-through.