How to choose the right go-to market strategy for your product

Not all GTM strategies are equal

There are a lot of factors that determine the success of a product but I would argue that perhaps the most important factor of them all is a product’s go-to market strategy. After all, history is full of great products that fell victim to a terrible GTM strategy. Like most things in life, reflecting on a product strategy gone wrong often reveals obvious missteps (hindsight is indeed a wonderful thing). However, this article is not about understanding what went wrong. Instead, I want to focus on a few factors that can help you craft a winning go-to market strategy.

Obviously, there is not just one way to ensure that your GTM strategy is a successful one but in my opinion, the framework that I am going to discuss does a great job of turning the task at hand into clear and actionable insights that can help you get started. I discovered this framework during my time at Kraft Heinz (I take no credit for it) and it’s served me immensely well since then.

The framework

Like with any other framework, let’s begin with the axes. Category Penetration (y-axis) refers to the maturity of the market your product’s competing in. A category with low penetration means that the market is in its infancy and the products that form this category serve a niche audience (think self-driving cars) and vice versa (high category penetration % means that the market is saturated).

RMS (x-axis) refers to Relative Market Share, which can be calculated using your market share divided by the category’s leading product’s market share. RMS is simply a measure of your position in the category – are you a market leader (Google search) or follower (Bing search). Once you determine these two factors, you can place your product on one of the five boxes in the framework above and with that, we can get started.

Launching in a new category

If your product is in one of the two lower boxes, it means your product is part of a market that isn’t completely established yet. As you can see, if you are in one of these two boxes, it doesn’t matter whether you are a market leader or a new entrant, your task is the same: educate users about your category. I am sure you’ve already spotted the danger with this approach: your product takes a backseat!

But this should be expected. If you are a company that is building a brand new category from the ground up, you first have to educate people about why this category is important in the first place – why should anyone care about non-dairy based milk? Why does space travel matter?

This is also colloquially referred to as the “first entrant problem” – as the first player in a completely new category, you have to spend the bulk of your time in educating people about the category before anyone will buy your product. And worse – once the market matures and people are ready to buy your product, a new entrant will come and rapidly gain market share (think Oreos). This is why it’s imperative that your product is synonymous with the category so that when people are finally ready to try out non-dairy based milk, they buy your non-dairy based milk!

If you find your product in this box, your GTM strategy shouldn’t focus on big media dollars (absolutely no TV campaigns!) but should instead rely on building strong communities of super users and reaching these users via the right distribution channels. A great example of this is Oatly, a Swedish Oat milk company that entered the US market by targeting boutique coffee chains.

Winning the market share

If your product is in the top left box, you are in a non-leadership position in a mature market. In this case, your job is to win market share against the market leader and hence, your GTM strategy and product messaging must focus on why your product is better than your competitors’. Think ‘no late fees’ (Netflix vs Blockbuster) or ‘thick is tasty’ (Heinz Ketchup vs tomato sauce brands) or even ‘Made with natural materials’ (Allbirds vs other shoe brands). This might seem easy (you should know what sets your product apart from all the other products in your category) but the trick is to link your product’s superiority to something that is important to the category.

Let’s take the example of Heinz Ketchup. It operates in the ‘condiments’ category and the driving characteristic of this category is that a condiment should ‘add to’ the taste of a food item it’s paired with (example: fries). So, to compete against the thousands of tomato sauce brands operating in this category, Heinz Ketchup focused on how its thicker texture enhances the taste of whatever you eat it with. Hence, their product strategy is built around marketing the ‘thick is tasty’ differentiation.

If your product is in this box, you want to highlight your product’s superiority as quickly and as aggressively as possible before your competitor has a chance to match your superiority claim. Hence, mass media is your friend, embrace it!

Leveraging your leadership position

If you are the market leader in a still maturing market (low category penetration), your GTM strategy should focus on continuing to build the market (middle box on the right). This is important because even though the category you operate in has found relevance, it hasn’t become mainstream yet. Hence, as a market leader in a still maturing market, it is your responsibility to ensure that your category doesn’t become obsolete (or else your product becomes obsolete with it). Hence, your GTM and marketing strategy should focus on outlining best usage practices for your product.

One product that does this really well is Spotify. From customized/mood based playlists (“Your Daily Mix”, “Jazz Dinner Party”), annual throwbacks (“Your Top Songs 2019”) to interesting new features (“Pet Playlists”), Spotify is always trying to uncover new ways in which users can engage with their product.

And lastly, if you occupy the top right box, congratulations for you have reached hallowed ground! You are a market leader in an extremely popular category and it’s time to reap your rewards!

If your product is in this box, your focus should be on establishing brand love. Focus on solidifying why your product enriches the life of your users beyond the functional benefits and seek to elevate your product emotionally. Nike does a brilliant job at this, their entire marketing strategy is built on unlocking an emotional benefit for their users (‘anyone can be an athlete’) instead of focusing on the quality of their shoes.

Once you establish this, you can further leverage your market leadership position by offering a more premium version of your product (‘YouTube Premium’) and unlock further revenue potential by upselling to your most engaged users.

Hopefully, I have shed some light on how you can get a leg up on crafting your product’s go-to market strategy. If you found this useful and have examples to share of how products leverage this framework, I would love to hear from you. If you disagree, I would love to hear from you even more!