by Expanding into a new market is not an easy endeavour for any company, regardless of the size. It requires financial and human resources that need to be justified. In addition to that, any new market or product takes away from your existing focus which, on its own, is incredibly important.
The process I describe here is how I have approached product positioning for new markets at my current job. Whether it’s expanding products or testing new distribution channels in the UK or launching in China, both the business and sales teams can truly benefit from involving the product and marketing team from the start. Because asking the right questions, coming up with hypotheses, and testing ideas is what we do every day. We spend the time to understand our customers.
Because asking the right questions, coming up with hypotheses, and testing ideas is what product and marketing does every day.
I have divided the process into three main steps; developing a hypothesis, conducting extensive researching, and making hard decisions.
Step 1. Developing a hypothesis: what do we think we know and are we right?
There is a reason why you’ve decided to look into expanding into a new market. In this step, we need to understand what those reasons are. It’s usually not one person’s opinion that has triggered this process. Begin by asking your team members two key questions: emphasise that you’re looking for their answer and not the right answer. You want honest reasons that explain why this market is interesting to your team members.
(i) Why now?
- Why are we going to this market now? Here, try to think of more reasons other than opportunistic deals that have come our way.
- What’s going on in the market that is exciting to you? What has lured us into this new venture?
(ii) Who is our customer in this market?
- Who are the potential buyers of our products and services?
- Why do they care about our service/product?
- Why doesn’t this product already exist in this market?
- What are the top priorities of the potential partners? What are their biggest use cases?
Step 2. Researching: All that I can learn.
(i) Competitors
Don’t tell me you don’t have any competitors. If not in the more direct way, you must have some indirect competitors. What insurance companies are currently operating in this market? What products are they selling that directly or indirectly compete with what you’re selling?
Things to consider:
- Specific insurance product landscape. What are incumbents selling? Did they stop selling a product? See if you can learn about the failed products.
- Prices, premiums, and coverage. What is being covered for how much?
- How are the products being delivered and distributed? Online, brokers, agents…
- Product details. What’s included and what’s not covered. What are the products called? (This matters too, trust me.)
- What are the competitor’s USP’s and who are they targeting? Can you guess why?
(ii) The market: Insurance
This step requires you to stay curious. Feel free to go off tangent and explore. Let the information you find lead you to learn more about the market. Like an investigative journalist let the story develop as you ask more questions.
This step can begin by reading all the market reports published by the consulting firms. I wouldn’t suggest reading them all, but for some markets, especially fast-moving ones like China, it’s important to read the latest reports. Look at what the reports say about the insurance industry for the past two years and their predictions. Take it with a grain of salt. Consultants and analysts can also be wrong. Learn what you need to better understand what’s happening in that market and make notes of the trends.
Next, read about the latest insurtech and fintech activities in that country. This includes investments, M&A’s, and potential closings of companies. In addition to insurtechs which are selling the same insurance product as you, what other insurance products are being sold through online distributions in that market? What stands out? For example, for China Xian Hu Bao’s model of a membership-based supplement to conventional health insurance stood out to me. My curiosity led me to investigate this further, realizing that the speed with which the company grew doesn’t compare with any other insurance product. Why? and how did they expand in such a regulated market so fast? Well, I found out they call it a membership because it’s not an insurance product. Also, by using Alipay and Ant Financial, they have positioned their product as part of an existing ecosystem, rather than a standalone product.
Finally, what are the insurance buying behaviours in this market? Who’s buying insurance and from whom? In China, it was surprising to see that many people prefer to buy insurance from an acquaintance than a broker. Or that families decide to buy insurance together, many times a family member buys insurance for the rest of the family members. Again, I looked deeper into this topic. How are families structured in China compared to western countries? I learned a lot about the family dynamic here, and believe it or not, insurance is a very sensitive topic within the Chinese families these days.
(iii) Secondary markets: the healthcare system, automotive industry, or investment appetite
I come from the world of healthcare and am very familiar with the industry: my own Canadian company operated in the health and mental health space, but I still managed to be surprised by the many things I learned by researching the Chinese healthcare system. For example, there are people in China whose job is to go to the hospitals in the morning and take a number and wait in the queue. They then sell that number/spot to patients who want to see the doctor that day.
At this stage, speak to anyone willing to speak to you! For research, start by reading more about the industry, don’t shy away from reading popular news outlets and Buzzfeed-like websites. It’s important to see what’s being said about the system on these platforms.
- Ask personal questions. Would your family do this? Where would you go personally to search for X?
- How often do people do that?
- Can I follow up with you regarding this to see the sources of the numbers?
Step 3. Making the hard decisions: building and testing products and messaging.
(i) Product(s) check-in: Do we have something this market needs?
It’s possible that the answer to this question is no, and that’s okay. This step is a check-in to measure if you have a deep understanding of the market’s needs as well as your company and product’s capabilities.
(ii) Who will benefit most from our existing product or potential product that we will build?
This is when you go back to the hypothesis from the beginning of the process and see if you were right about whom to target.
(iii) What stands out as barriers to entry?
Is it customer behaviour, price and resources needed to educate the market or compete with the existing competitors? Keep an eye out for barriers for insurance products and your product specifically.
- IV) What can you do with product positioning to address these barriers?
Bringing your learnings together, this final stage is all about working to define aspects of your product or marketing tactics that have a strong answer to the market’s problems.
Being a unique selling point, this will differ for each product and the company’s capabilities. At Medigo we know that our product is unique in its ability to provide high-quality medical treatments as a result of a claim. One of the major competitive advantages we have in any market is our breadth of experience providing international access to exceptional healthcare services. So when I look at our presence in the Chinese market, I can find ways to emphasise this to gain the trust of the potential buyers of our Cancer and Critical Illness product.
In summary, there is great value in adding a product positioning exercise to the market research phase of opening up new markets. The best time for this exercise is after the business and research teams have conducted initial research, spoken to some potential partners/investors, and have some first hand experience speaking with other active companies in the insurance space.
As for who should conduct this exercise of product positioning, I would say someone with experience in product development, marketing, and ideally strategy. This person needs to be neutral and very good at bringing people together. All departments including operations, sales and of course the leadership team need to be involved in developing a hypothesis and validating the product strategy.
