I keep writing a lot about the SIngle Target Market. Its a term I learned from Dean Jackson. I have known about segmenting and niching but breaking down a market by usage was something which appealed to me.
Now why is it important to drill down to a Single Target Market . Once you have been able to figure that part out, you can then work on the different media you can use to engage this person and then work on what is the message you will send through the different media.
To show a practical example. We were targeting companies for selling our services. Now you can choose partners in different ways. We first did a segmentation by OEMs. If they were selling a specific OEM’s product, then we thought we could make them a partner to sell add on services from us – but these partners could be in different states, they could be of different sizes – single person companies, large companies and everything in-between. They could be owned by men, women, public listed or private. So we decided to put the limit on minimum number of employees and maximum number of employees to segment further.
As we kept on going deeper we found even more characteristics that we had not even noticed when we did the general rule partners of OEMs.
So one rule of thumb that I have figured out , to identify a single target market , is to figure what other attribute exists that could make this data set smaller till it can’t be made any smaller. Then figure out how you can combine based on the usage and expand from there once you see success with one usage area.
Till next time then.
Marketing stamina is all about being able to last out in a market, while you take time to get in and dominate.
The single target market is a starting point within a market niche which you aim to pick up and dominate till you aim for the next one.
P&G or Unilever both have products which wash clothes. But they have an independent brand Tide / Rin ( P&G / Unilever ) which washes clothes white and Ariel / Surf ( P&G / Unilever) which removes stains from your coloured clothes.
Such large companies with massive marketing muscle, still go after one market at a time and generally create different brands to ensure a clear differentiation.
But the clearer objective is to concentrate all their energies to target one segment / one niche / single target market. By concentrating all your energies to focus on just that one market, you don’t divert your energies in trying to be everything to everyone. What that ends up doing is giving you more freedom rather than constraint to think creatively about various ways to meet the customer.
Since you only have to focus on one set of prospective clients, you then find the most convenient and cost effective ways to reach out to them and find the best messages which resonate with them, resulting in quicker market penetration. This means your funds which you budget as part of your market stamina can last longer and you have a much higher chance of success.
Till next time then.
I keep writing about identifying a Single Target Market. It all starts by segmenting the market and then breaking it down further till you can reach a level of control on the market which you can Dominate.
Once you start dominating one market, you can move to the next, and next till you dominate the whole segment.
As an example you are the Product Manager for a telephone company which wants to segment the market by coming out with phones targeted at ladies. You can segment this further by either age , rural and urban, by the language options or all of them.
After you have done this level of segmentation you are left with a certain demographic profile combinations. Lets say one of the combinations you decide to choose is a lady, urban, upto 40 years of age, speaks English.
What you do next with the usage could look at this combination and see how many of these are homemakers and how many are working ladies. Now comes the interesting part. In this age group a lot of these ladies could be moms with small kids.
These days kids are smarter than us. So they could end up using their mother’s phone even when it’s locked because they have noticed the password that the mother uses. They then accidentally delete an official email or send an unwanted message accidentally to someone which is embarrassing to the mother later.
As a product manager can you incorporate a feature in the phone where working moms can physically block their phones (like child locks in cars) so that she’s at peace that her child will not be able to make calls or access official emails. You then target this specific usage to go to market. While even other ladies may like this, you’re targeting all your messaging to this segment alone and wanting to dominate it.
Till next time then….think of domination of your market.
I keep harping about the Single Target Market whenever you want to enter a new market. The Single Target Market helps you define your segmentation or niche very crisply, including the use case. Sometimes though its difficult to identify this easily because you believe your service is good for different people and you don’t want to miss any market.
When I am going no where with this discussion, I change track and ask the people, whom do you not want to do business with. So to use the analogy of the picture above you could start by eliminating the blue and orange soft toys.
So from a B2B perspective, we first identify which is the geography we would like to start with so that we immediately focus our energy on the most efficient geography, then we identify who would be the lousiest industries to work with – this could be because those industries don’t have the need or they don’t pay well or they haven’t reached the level of supporting infra for your product or service to work etc. This way we eliminate more than half of the universe that we could target.
So now we start moving forward. Out of the industries that we are left which are the top 2 in terms of spending in the area that we operate. You fish where the fish are, why make life difficult. With this you eliminate may be the remanning 30-40% of the market. What is left then is about 10-20 % of the market from where you started.
Now between these, which companies can you easily make an entry versus some extremely large companies where the hierarchies are so huge that you will never be able to make an entry. Then you would like to eliminate the companies who may not be able to afford what you have to offer.
So from the whole universe where you could market or sell your product or service you have now come down to less than 5% of the market that you started with.
From here it becomes a choice of selecting the kind of customer you want to do business with. Then you have to be relentless in your focus on these customers and have the marketing stamina for the next 2-3 years if you want to make any meaningful inroads.
This is a counter intuitive way to move forward but if we don’t narrow down our choices we will not be able to dominate the market.
Till next time then.