---
title: "【Li Jiao Shou】People in Marketing May Not Know What a \"Market\" Really Is"
description: "Many people in marketing departments are busy promoting activities, chasing trends, and even making calendars, but they forget to truly understand the most basic definition of marketing: what constitutes a market. Sometimes, major oversights stem from an insufficient understanding of fundamental principles. A market is not just a group of people or a product category; it is a group of consumers who use similar products to satisfy similar needs and who reference each other's opinions when making purchase decisions."
author: "李靖"
publisher: "New Distribution"
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published: "2016-02-25"
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---

# 【Li Jiao Shou】People in Marketing May Not Know What a "Market" Really Is

> Many people in marketing departments are busy promoting activities, chasing trends, and even making calendars, but they forget to truly understand the most basic definition of marketing: what constitutes a market. Sometimes, major oversights stem from an insufficient understanding of fundamental principles. A market is not just a group of people or a product category; it is a group of consumers who use similar products to satisfy similar needs and who reference each other's opinions when making purchase decisions.

Please click on the "Li Jiao Shou" above to subscribe to the official account. Many people in marketing departments are busy promoting various activities, chasing trends, and even making calendars, but they forget to truly understand the most basic definition of marketing: **what constitutes a market**. Sometimes, major oversights stem from an insufficient understanding of fundamental principles.

**Part 1**

First, this is a principle everyone knows:

For any new product to successfully enter the market, the necessary condition is: **at least achieve effective penetration in one market first.**

For example, if a market has 100 people, once 10-20 people in that market start using the product, it will trigger a tipping point, and others will follow suit. But if there are 20 markets of 100 people each, and only 1 person in each market uses the product, even though there are still 20 users, it will not trigger a tipping point.

(Figure: In the same market, once penetration exceeds a certain critical point, explosive growth occurs.)

> "Isn't this just 'market focus' mentioned in any basic marketing textbook? Of course I know that!"

——**Most marketers think they are focusing on a market, but in reality, they may not accurately understand the true meaning of a 'market'.**

Previously, during consulting work, Li Jiao Shou encountered a situation like this:

An O2O company under a certain IT brand (mainly providing on-site computer and phone repair services) **had almost all the conditions for successful marketing in its initial promotion**: high overall service satisfaction, low prices (e.g., only 49 yuan for on-site dust cleaning), good copywriting, strong team execution, and even market focus—targeting a few high-end residential areas for promotion to build penetration first.

**But in the end, it had little effect. Where was the problem?**

**Part 2**

**This product may have entered hundreds of markets, but it did not enter any single effective market.**

> "Why do you say that? Didn't they 'focus promotion on a few high-end residential areas'?"

**Generally speaking, an effective market must meet at least these 4 conditions:**

1. Have a group of actual existing customers;
2. These customers generally have certain needs;
3. There is a range of products and services to meet their needs;
4. When deciding to purchase, consumers in the market reference each other.

Most people have an intuitive understanding of the first three conditions. **But unfortunately, the last condition is the key to successfully launching most new products into the market**——**consumers in the market reference each other.**

For example, if you sell the same enterprise software to 10 small and medium-sized companies in the same region, on the surface it seems like you are entering the "Beijing startup office software" segment, but as long as people from different companies do not reference each other's opinions when using office software, this is equivalent to 10 markets.

Similarly, in the example above, the O2O company's on-site computer repair service seemed to focus on a few high-end white-collar residential areas in Beijing, but I believe that almost no white-collar workers in these areas would exchange opinions with their neighbors on the issue of "how to repair a computer."

**This means that if a residential area has 2000 households, you may have entered 2000 markets, not 1 market.**

(But if you were promoting to office buildings or companies, that would be market focus—if your computer breaks and you don't know what to do, you might exchange opinions with the person at the next desk.)

**Part 3**

> "Why is this not okay? Why do we need to focus on one market instead of just spreading out and spending money like this?"

**Because no company can afford to pay for all marketing activities at once; any marketing must rely on a series of chain reactions and leverage.** That is, after the initial marketing stimulus, consumers can begin to actively discuss and recommend.

We always think that the main body of a company's marketing is the marketing department and sales staff, but in reality, it is not.

**In fact, the main marketing activity of any enterprise is always completed by consumers, and the marketing department only plays a triggering role**——think about any product you consume, whether it's clothing, beverages, apps, or the Li Jiao Shou official account; it's more because you saw people around you using, recommending, discussing, and sharing, rather than advertising.

**Imagine if all marketing relied on the marketing department's budget, what would it be like**: You buy a Huawei phone. Throughout the decision-making process, there are display effects from friends using it, discussions about the phone at dinner tables, photos of a friend sharing their new phone on social media, and experience posts from users on forums——**if all these factors that have the greatest impact on your decision required payment from Huawei's marketing department, no budget would be enough.**

So, the role of the marketing department is more to stimulate chain reactions among consumers, discussers, opinion leaders, and other groups in the market, letting them help you market, rather than handling all marketing activities alone.

This means that any promotional activity must stimulate chain reactions within the same market, and the key to all this is——**you have entered at least one market where consumers reference each other's opinions.**

**Part 4**

Let's return to the figure mentioned at the beginning:

In a market, when the density of consumers increases to a certain level, and when a consumer sees more and more people around them paying attention to something or buying a certain product, explosive growth will occur.

When density has not increased to a certain level, growth will be slow. So, almost all new products in the early stage concentrate resources on attacking a few markets to reach the tipping point, rather than spreading to 2000 markets with a penetration rate of one-thousandth in each.

**Since we need to focus on one market to leverage the power within the market, how do we define a market?**

**Part 5**

**"You should define a market by how consumers satisfy their needs, not simply by product category and demographic."**

Earlier, we mentioned the 4 necessary basic principles for a market to be called "a market":

1. Have a group of actual existing customers;
2. These customers generally have certain needs;
3. There is a range of products and services to meet their needs;
4. When deciding to purchase, consumers in the market reference each other.

**If summarized in one sentence:**

**"A market is a group of consumers who use similar products to satisfy similar needs and discuss with each other."**

From this perspective, most entrepreneurs and new product marketers have a very vague and narrow definition of their own market.

**Some simply define the market by product attributes:**

> "Our positioning is green healthy salad."
> "Our positioning is exquisite high-end jewelry."

**Others simply define the market by an imagined group:**

> "Our salad targets urban new middle-class consumers."
> "Our jewelry targets women aged 20-40 who love beauty."

Such answers **merely describe a product category or an imagined target group, but do not accurately describe or position any market**——there are at least hundreds of millions of women aged 20-40 who love beauty, each with thousands of different needs, preferences, purchase reasons, and levels of opinion reference. How can this be called a market?

How can such descriptions guide the specific work of frontline employees?

**Part 6**

A correct market description should clearly explain how your product satisfies needs within a group that can reference opinions. **It should guide an employee's specific work, which is a basic requirement of any market strategy**——after all, any policy that cannot guide specific work is nonsense.

**It is often defined by "how the product meets the needs of target users," rather than by product category and user group.**

For example, if you are a broom-selling company, the market you define is: "**College students temporarily cleaning their rooms to prepare for their parents' surprise visit.** " This short sentence forms a guide for everyone's work.

**The product department knows:**

> "Since it's for dormitory students welcoming a surprise visit, compared to household brooms, this broom doesn't need to be durable or high-quality (in contrast, housewives have high durability requirements), but it needs to be low-priced, small (so it doesn't take up space in the dorm), and easy to use (college students may not be good at complex operations). So a plastic set is the best!"

**The channel department knows:**

> "Since it's for a surprise visit, it requires high purchase convenience, so we won't distribute to large supermarkets or e-commerce; we'll focus on campus convenience stores."

**The copywriting department knows:**

> "These college students may not have the habit of cleaning their rooms regularly and find it troublesome, so the key appeal should be saving effort and time. We should highlight the concept of 'one set is enough,' telling students that the room can be quickly tidied without shopping around; our set is all they need."

Similarly, the PR department, service department, and even HR department all have guidelines for their work.

**So, the market for the salad and jewelry mentioned earlier might need to be defined like this:**

> "Office workers need a low-calorie green food to replace lunch, to alleviate the guilt of eating too much the night before, while also showcasing a healthy lifestyle image among colleagues. To this end, we provide them with a new meal-replacement salad."

> "Some beautiful women have spending power but don't buy big-brand jewelry because they don't want to be seen as followers or show-offs; instead, they want to express their unique artistic pursuit among their close friends. To this end, we provide high-quality jewelry with unique designs and no brand logos."

The above two descriptions more clearly explain the market you are entering and provide guidelines for the next marketing plan, letting everyone know how to work.

**Part 7**

> "Why define the market by 'what needs consumers use the product to satisfy' instead of simply describing product attributes and target groups?"

**You cannot define your market only by the product**

Even identical products may satisfy completely different needs, and thus are not the same market at all, violating the basic principle of "market focus" mentioned at the beginning.

De Beers once used the slogan "A diamond is forever," turning a stone into a symbol of marriage, making countless men spend a year's income on a product with no practical use, just to prove "I love you, so I am willing to spend meaninglessly for you."

This was "a market," but later De Beers used the exact same product, just changed the slogan, and it was no longer the same market.

**Later, De Beers found that the left hand market was saturated (everyone bought wedding rings), so they developed the right hand market with the slogan "Your left hand says 'we', your right hand says 'me'."**

If the previous diamond ring satisfied the psychological need of "proving my spouse loves me," then the right-hand diamond ring now satisfies the need of "proving I am an economically independent woman who can buy herself a diamond ring." **The former evokes the "courtship" motive, while the latter evokes the "social status" motive.**

And these are not the same market at all; all corresponding channel strategies, market strategies, and sales strategies are different.

**You cannot define your market only by user group**

Simply put, the same users may satisfy completely different needs.

Over 100 years ago, the average American had 2 pairs of shoes—one for daily wear and one for Sunday church.

Now, the average American owns 8 pairs of shoes, and 19% of women own more than 50 pairs. Some are for showing status (like leather shoes), some for attracting the opposite sex (like stilettos), some for comfortable exercise (like running shoes), and some for maintaining comfort while showing status (like cushioned leather shoes).

The same people, in different scenarios, use the same product to satisfy completely different needs, and these are not the same market.

**You cannot define the market only by "how consumers satisfy needs"**

There was a milkshake company in the US (I forgot its name) that, when entering the market, found that all milkshake companies defined themselves as "milkshake companies," thus segmenting into various competitors:

"Premium milkshakes," "mid-range milkshakes," "French-style milkshakes," "fruit milkshakes"...

Since they were all milkshake companies, all competitors had the same direction: **make milkshakes taste better.**

But this company didn't rush to define itself as a milkshake company; instead, it first asked: "Why do Americans drink milkshakes? What task do they want to accomplish with milkshakes?"

Then it found: Americans drink milkshakes because they are driving to work in the morning and don't have time for breakfast; they want to solve breakfast while driving. Milkshakes can be held with one hand, are easy to drink, and provide energy, so they are the first choice.

In the end, they defined their market as: "**Helping people driving to work in the morning solve breakfast with one hand.** "

In this task, "taste" is not important. So while competitors were busy improving taste, they focused on improving the cup's grip, the milkshake's thickness (to prevent spills), and adding multiple nutrients (like nuts to supplement other breakfast nutrition) to help consumers complete the task better.

So, when you define a market, remember to analyze completely:

**"Which consumers, using what product, to satisfy what need or task?"**

**Part 8**

**Find a group that can provide reference opinions and use leverage.**

You now know there is a group of consumers using your product to satisfy certain needs, and you understand the market you are about to enter and promote heavily. But if you forget the last key step, you may lose everything—find a group that can closely reference opinions as your first market.

In the earlier O2O "on-site computer repair" case, because users in high-end residential areas in first-tier cities never communicated with each other, you faced 2000 individuals rather than a group, making it impossible to use the leverage of the group (letting consumers promote and discuss for you) and unable to create a sustained chain reaction from one wave of marketing.

This led to high promotion costs but little effect.

So, which group should you start promoting to?

Most people mention starting with "groups with urgent needs" or "high-frequency demand groups," but the most often forgotten point is: the first wave of promotion must target a group that can influence, communicate, and exchange opinions with each other. The more frequent this opinion exchange (e.g., a car club, the same company, a group of close friends), the more you can leverage the chain reaction among consumers to have them bear 90% of the marketing costs.

Conclusion

**In many cases, the density of consumers in the same market is a key factor for business success.**

Because once the number of consumers using similar products to satisfy similar needs in a market exceeds a certain critical value (e.g., 15 out of 100 people), the mutual influence and opinion reference among consumers will form a chain reaction, and the entire market will experience explosive growth.

Back then, Zipcar car rental service launched uniformly across the US market, resulting in slow growth; no matter how much they cut prices, promoted, or advertised, it didn't work. **Later, they focused on a few key areas to increase density, and they grew rapidly, gradually conquering one market after another.**

Another example is articles shared on social media. If you happen to see 1-2 friends share an article with a bland title, you almost certainly won't open it. But if you scroll through your feed and see a dozen friends sharing the same article, even if the title is as boring as "one two three four five," you'll open it, eventually leading to a viral spread. (The density of sharing exceeds the critical point)

**Before this critical point, users are mainly influenced by the marketing department's work (e.g., whether the title is good), but after the critical point, users are mainly influenced by other users (e.g., many people are sharing it), and this is the chain reaction.**

The key to activating any chain reaction is to first define and enter at least one market. This market is not simply defined by geographic location, age group, product category, etc., but must be **"a group of people using similar products to satisfy similar needs and referencing each other's opinions."**

Only then have you achieved the basic common sense mentioned at the beginning: **market focus.** (After all, entering 2000 markets at once is not focus)

At this point, you can leverage the chain reaction of consumers and the power of marketing leverage, rather than relying solely on your own marketing budget.

Preview: Li Jiao Shou has been writing articles about copywriting analysis, but later found that many people don't understand copywriting on the surface because they don't understand the market itself. So, I plan to write a series of articles to clarify the concept of "market" that many people confuse. Next, I will gradually analyze "how to use leverage in the market" and "how to segment consumer groups based on psychological needs," so stay tuned.

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