Industry vs Market
 by Gene Muchanski, Editor
The Dive Industry Professional

Have you spent the last decade or two carving out a nice niche market and creating an awesome circle of influence for the programs, products, and services that your company specializes in, only to see your market share slip through your hands because you don’t know how to diversify your portfolio?  I hope you are not one of those people who don’t know that a bird in the hand is worth two in the bush!

As we enter into the dog days of summer, at the beginning of hurricane season in the Caribbean, while we are preparing to exhibit at the DEMA Show, there is an awful lot of industry product planning going on that is bound to go sideways.  From our vantage point, we are seeing a lot of industry planners getting ready for the next upcoming buying season.  Many will be ready for the official launch of the 2025 season on September 1 while others will wait until November.  Waiting until November to make your pitch is the first mistake.

The second mistake we are noticing is as plain as day to dive industry Professional Business Advisors but apparently not to some companies in the diving industry.  We are starting to see a number of companies trying to diversify their product offering without taking into consideration what industry they are in and what we know about niche markets.  If I spelled out the red flags we see going up around them, you would immediately be able to recognize the companies who are making these critical errors.  Rather than offer them unsolicited advice, maybe we should just explain the difference between an industry and a market.

An industry is a group of like-minded companies that produce a similar program, product, or service.  Let’s call them products.  In the “diving industry” we recognize the predominate stakeholder groups (aka Industries) as Manufacturing (33), Wholesale Trade and Distribution (42), Retail Sporting Goods (45), Sports and Recreation Instruction (61), Travel Agencies and Tourism (56), and Organizations and Associations (81), to name a few.  The most successful companies in our industry produce products that are similar to what is produced in their industry but have chosen to specialize in products related to diving.  There are a few that are engaged in other industries, sometimes to the detriment of their own success.  The numbers in parentheses are the first 2-digits of their NAICS codes.

The word market has a few meanings for us.  A market could be a description for a pool of potential customers.  i.e. There is a large market for my product.  It can also refer to a group of buyers and sellers that engage in commerce for mutual benefit.  i.e. To be successful in the diving industry, you have to understand the composition of the market.  The words market and marketplace are often used interchangeably.  i.e. A market is a place where buyers and sellers meet to do business.   Professionally, I would rather use the word marketplace to describe a location.

When we talk about a niche market in the diving industry, we are actually targeting a group of customers who are looking for diving and diving-related products.  That is why the diving industry is really a niche market, not an industry.  We are a conglomerate of industries that produce diving and diving-related products and are in the marketplace to sell our products to people interested in what we produce.

For the past 70 years, there have been many businesses, from different industries, that have produced products specifically for diving and diving-related functions.  As successful producers and sellers of diving equipment they have acquired a large customer base of people who have become part of the diving niche market.  As long as there was a demand for diving and diving-related products, these specialty companies were able to stay in business by meeting the demand.  In recent years, two important changes have altered the marketing mix.  Increased competition from new product producing companies has decreased their market share and a decrease in the number of new divers in the market has decreased their sales.

Normally in a free market economy, a number of options would be on the table.  Marginal companies would leave the diving niche market in search of more profitable markets.  More established producers would fight to steal market share from their competitors.  More successful companies would attempt to stimulate the market to produce more divers, who in turn would purchase more products.  However, in this post pandemic, recovery economy, critical social and economic demographics have changed.  Maybe even permanently altered.  With the passing of the baby boom generation, the raw population numbers are down.  The younger generations are not as interested in scuba diving as the boomers were.  Annual certification numbers are down.  Younger divers are more interested in single experiences rather than committing to a lifestyle hobby.  The sale of complete diving outfits is down dramatically.  New divers are more likely to rent their gear when they dive, instead of purchasing it.  That is not an encouraging picture I’m painting here, and unfortunately, many Dive Industry Professionals agree with this bleak scenario.

It appears that we have come to a fork in the road in our industry.  And I know that Yogi Berra said, “When you come to a fork in the road, take it.”   But all kidding aside, whichever fork you decide to take, opportunities will open up on the other fork.  One option is to know your niche in the diving industry.  Are you going to continue to specialize in your niche products, and market them to your niche audience?  Can you increase your niche market and your market share in it?   Are you going to increase your level of specialization in the diving community and get better at everything you produce that is diving and diving-related?  Will you become the leader in your niche product category and niche market customer group?  If you decide to expand your product diversification, would you create new customers for your new products?   I certainly hope so.

Product diversification can be a good thing, but it can be a step in the wrong direction if you are not matching the right product with the right customer, based on your core competency abilities.  I am seeing some travel advisors in the diving industry starting to sell Cruises and African Safaris as part of their product offering.   They are dealing with new travel vendors they meet at travel industry shows and they are coming into contact with clientele from a totally difference demographic than the diving community.  Granted, Cruise Ships and African Safaris have significantly higher sales potential, but the increased competition and marketing challenges can also be significant.  The challenge to becoming successful would be not to dilute your sales potential to your active diver database while trying to sell a new product to an old database that may not be interested in the new product.  Of course, to me, a perfect crossover from a diving trip to a safari, would be to baby boom diving clients who have decreased their dive trips because of age and are looking for a vacation alternative.  Finding out which of your clients meet this situation could increase your sales and client retention.

When you understand your primary industry’s core competencies and you can properly match consumer niche products with the purchasing niche consumer, you can dominate your niche market.  When you try to grow your business by adding new products to your line without understanding how to and who to market your products to, it could be a recipe for disaster.

This is an exciting time to become part of the Global Diving Business Network.  For more information about global marketing opportunities, contact Gene Muchanski, Executive Director of the Dive Industry Association, 2294 Botanica Circle, West Melbourne, FL 32904.  Phone: 321-914-3778.  Email: gene@diveindustry.net  Web: www.diveindustry.net

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