Ch3: Targeting the right

markets

Go To Market
Strategy

Overview
I. Review of Chapters 1 & 2
II.

Chapter 3: targeting the right markets

1. Common targeting pitfalls
What not to do: Enconix

2.Six steps to successful targeting

What to do: Marriott International

3. What we learned
4. Critique
5. Questions

Review: (Ch 1) Go-to-market

Strategy

Choice and alternative: increasing channel availability

(P.7) Today, its no longer just about what you sell;

its also about how you sell it

Go-to-market strategy:

Total Customer
Experience

A game plan for reaching

and serving the right
Purpose
markets, through right
Attract and retain
channels with the right
the
products and the right
most desirable
customer
value proposition

Increase sales with

 4 ingredients of a winning go- to market

strategy

Ch3:
Market

Ch4:
Customers

Ch6:

The product
and
The value
proposition

Ch5:
Channels
and
Partners

Review: (Ch 2)
The ten commandments of going
to market
I. Go-to-Market strategy must start with the customer
Exact information can gather from customer:
product, channel, value proposition, markets

II. Aggressive use of low-cost channels will have a

dramatic impact on profits
III. How you sell has to fit with what you are selling
Customer, Economics, Complexity

IV. There is Always a tradeoff between market coverage

and control
The high- control strategy vs. The high- coverage strategy

V. Not Every go-to-market solution has an e in it

3 reasons why e-channel is not work

VI. Getting channel cooperation is more important than

preventing channel conflict
VII. You cannot be everywhere at all times for every customer
VIII. The business model has to be sound for a go-to-market
strategy to succeed
IX. It takes time for new channels to become productive.
Patience is necessary
12 to 24 months to build and roll out a new go-to

market strategy:

X. To win big a go-to-market strategy must be innovative

and different

Chapter3: Targeting the right market

Targeting the right

markets

Its impossible to choose a successful mix

of channels until you determine which
markets those channels are supposed
to reach. Pg73
Ch3:
Market

What not to do: Enconix

Picked the wrong market: Enconix
(1998) 246 employee and over $55 million in sales
Disciplines and savvy business development focus
Niche of small-to-mid sized industrial manufactures
with $50 to 250 million in revenue

Developed understanding of the needs and

information technology requirement of their
market :
(1990s) ERP SCM
CRM
Developed new software and service to meet the
expanding needs

(1998) Change the direction: Y2K focus

Software developers
Y2K specialist
Less impact of Y2K: the failure of Y2K focus
ERP business had changed dramatically
Customers reduce the IT spending due to Economic slow down
Insignificant and biased marketing research

Change the direction: PRM focus

Y2K specialists
PRM consultants
Consumer goods manufactures
Food distributor
Computer hardware vendors

(Aug 2001) Sales: $ 28M

New target markets

=
No experience
No understanding

The Four Pitfalls of Market

Targetingand How to
Avoid Them

Trap #1: Chasing untried and unproven blue sky markets

and neglecting solid, available business thats close to home (p.
81)

Trap #2: Putting too much weight on 3rd party market research
reports, which often have inaccurate, agenda-driven estimates

Trap #3: Assuming that markets can be good or bad,

outside of the context of your unique offerings and your
business goals

Trap #4: Ignoring crucial internal sources of information when

evaluating new market opportunities

Market targeting trap #1

Chasing untried and unproven blue sky marketsand

neglecting solid, available business thats close to
home

Usually, the pursuit of entirely new market opportunities is the slowest, most
expensive, least effective, and least certain way to increase revenues
-Reasons Why???
1:Customers: New customers in new markets are difficult to reach
2:Products:
New products are much more difficult to sell than existing
ones

Companies fall into two basic camps:

1: The Blue Sky approach (e.g. Enconix)
From the established to the uncharted
2: The Build on your strengths approach
Grab the low hanging fruit first, then go higher

To avoid this trap remember: Most Companies have more potential business
then they could ever handle

Market targeting trap #2

Putting too much weight on 3rd party market research

reports, which often have inaccurate, agenda-driven
estimates

Recently, many market research firms have been publishing highly

inflated estimates

At the minimum, get multiple, independent sources of information

when evaluating a market

Take the time to learn how these conclusions are being made

In the end, you can eliminate the risks of over-reliance on 3 rd party

market research by doing some of the work yourself

The bottom-line is that you should never make the decision to

participate in a market based solely on the basis of 3 rd party
research,

Market targeting trap #3

Assuming that markets can be good or bad, outside

of the context of your unique offerings and your
business goals

Just because a market looks promising, doesnt mean it is a good

opportunity for you

The right market depends on what youre trying to sell, and if that
new potential market fits within your business goals
Example: Steady growth vs. maximum sales growth

To avoid this trap remember, there is no such thing as a good or

bad market, each should be evaluated with respect to your unique
business situation
Consider the costs, risks, and the time-horizon of the market entry

Marketing target trap #4

Ignoring crucial internal sources of information
when evaluating new market opportunities

Within most organizations lies a wealth of information

about opportunities and risks in the market place
which most choose to ignore
To avoid this trap look to three sources of market
insight within your company:
1.
The sales force
2.
People who deal with partners or distributors
3.
People who know a lot about the competition

Six-steps for market

targeting*

1. Develop a universe of markets

2. Choose market evaluation criteria
3. Evaluate target markets against
criteria
4. Validate markets with key prospects
5. Prioritize markets for penetration
6. Fine-tune target markets over time

1. Develop universe of
markets

Generate list of potential markets

Consider which markets offer good opportunities

Which are similar to those you are already
successful in?

Get input from those within the company

Add markets recommended from other sources
Narrow down removing markets which:

Have no need for you product or service

Have prohibitive entry costs
Legal or regulatory restrictions

2. Choose evaluation
criteria

Choose a workable number of criteria

Criteria can include:

market size
market growth rate
ability to exert brand leadership
cost of entry
cost to serve
channel availability
competitive density
strategic fit

**There is no right set of criteria for

everyone!!!

3. Evaluate targets
against criteria

Evaluate using a scoring

metric
May not find information for
all criteria
Be ready for information
Market
Fortu Small
gathering
evaluation ne
Busine
criteria
500
ss
This step should produce 5-10
Core
Market
***
**
good markets
Criteria Size
Market
growth
rate
Seconda Channel
ry
availabilit

High
tech
verti
cal
**

**

***

(?)

***

**

**

4. Validate markets with

key prospects

Purpose: final check of your

best potential markets
Recommendation:

Call 30 customers in target

markets over 3-4 weeks
Measure how receptive they
are
Check for any potential sales
Produces group of attractive
markets ready for you

5. Prioritize markets

Two schools of thought on prioritization:

1) Choose market which scored best

evaluation

Pursues best market first, but may not produce

best results

2) Choose market which offer opportunities

right now
Decision should relate to time and investment
costs needed to penetrate market
Create a plan for market penetration

6. Fine-tune markets
over time

Market conditions will change over

timeit is inevitable
This is not a one-time process

Should be repeated at least once per year

The worlds best companies take a

dynamic view of their target markets,
and so should you!!!

Best Practice: Marriott

International

Thorough and creative in identifying

new markets

Scientific approach to market evaluation

Travelers are diverse and cannot be served

by a one-size-fits all brand
13 stage evaluation process that includes
competitor analysis, fit with corporate
goals, and mathematical scoring to rank
opportunities

Ongoing market-tuning

What we learned

Know thyself
Look toward your current customer
base for growth opportunities
Formulate growth strategies that
build on your strengths

Critique

Tool for continuous market

evaluation?

Permanent cross-functional team

Questions

How can focusing on existing customers

help a company achieve growth?
Opportunity to increase share of customer,
information concerning new market possibilities

Name three internal sources of

information available when evaluating
new markets.
Sales force, People who deal with partners or
distributors, and People who know a lot about the
competition.