How to solve the Challenges of identifying a Single Target Market

Customer Delight, Marketing, niche, single target market

Whenever I talk to my team or other business folks, one major resistance that I get from all of them is on this issue of selecting a niche or single target market.

Everyone thinks that their product or service can solve so many different problems for so many people so why limit. It basically comes out to be about whether you want to be a small fish in a large pond or a big fish in a small pond.

And it takes so much of my energy to convince them, that all I am asking them is to prioritize the market entry into different markets. Once you enter one niche, you have to dominate it, take the learnings from that and then move ahead.

People still find it difficult. So I share with them this process, which is inspired by Dean Jackson and his concepts of the Eight Profit Activators.

Step 1 : Isolate all the geographical markets you have the bandwidth to operate in. These could be national , international etc. You can put this in the columns from from B to whatever in one row of your spreadsheet

Step 2: Isolate all the use cases for each of these geographical locations that your product or service can do. You can put this in column A of your spreadsheet.

The moment they start filling (not ticking, which is a copy and paste process) this two by two matrix with their ability to serve the market and get delighted customers, they start backing off.

They may still end up with about 5 or 6 niches , in which they think they can certainly delight customers. Then I ask them to look at which would give the highest probability of profit from the same effort. Since they also realize that time is limited for everyone, after this step most automatically identify a Single Target Market.

Hope the above helps you in identifying your niche and helps you dominate the market.

Till next time then.

Carpe Diem!!!

Finding the right market niche

Marketing, niche, single target market

Today I had an interesting discussion on choosing the right niche or the Single Target Market that I keep mentioning with one of my colleagues and she was not convinced on my logic. So I will throw this open to your comments. I will give my logic and my colleagues logic. In marketing there’s nothing right or wrong. The market decides. You try to go with as much common sense and logic.

We will discuss it by using an analogy of the Indian automotive market. The Indian passenger transport market for personal travel is primarily broken down into two wheelers and four wheelers. The two wheelers are scooters and motorcycles and then you have cars which start from 800CC engines all the way to the Bentley and Rolls Royce.

Suppose the product we have is a 1000CC engine car which is more expensive than the 800CC car (not our product) by almost 40%-100% and is more expensive than the general two wheeler by about 10 times.

So who should be the customer you should target. Someone who has an existing 800CC car and wants to upgrade in life because the car has got old or should we target the person who owns a scooter or a motorcycle and wants to upgrade in life because the family has grown and they can now afford to buy a car.

My suggestion would be to look at the person who already has a 800CC car and suggest our product as an additional car or an upgrade from the old car. My colleague’s logic was that there’s a much larger market which is driving two wheelers and if we can convince them to move to our product rather than to the 800CC car we would be able to target a much larger market even though it will be a tougher sale to crack

I would love to hear your comments below on what you think we should do out of the two options or if you can think of a third option.

Till next time then.

Carpe Diem!!!

The advantages of a Single Target Market

B2B, Marketing, Product Management, segmentation, single target market

Once you have identified your niche and segmented the market by usage, you may be left with a very small portion of the overall market which you had originally thought.

In context of the B2B space you should at least have a bundle of around 100 accounts to start out , as your minimum economically viable market, to test your offerings. You can build this to a maximum of a thousand. Anything more will be unmanageable if you’re a small company.

Once you start of with this bundle of 100 accounts, you get to learn and adapt your offerings extremely quickly. Within these 100 if you keep sustained education based marketing, you will be able to create a “brand” for yourself. While B2B marketing is a slow process because of the inherent inertia of a complex structure like an organisation, you can also be sure that within a typical period of 3-5 years 50% of these prospects will be looking for a new vendor for the services you offer.

Once you’re able to get into a conversation with one prospect, you can quickly identify the challenges and mould your future communication with the new understanding. As you grow, your interactions, your learning compounds at a much faster rate because all the prospects are similar in nature. So the challenges they face could be similar and the solutions that you deploy can also be deployed faster.

Which helps you reach critical mass faster and you’re able to quickly dominate that market before moving to th we next market.

Till next time then .

Carpe Diem!!!

Segmentation of a niche by usage

Marketing, Product Management, segmentation, single target market

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.

Carpe Diem!!!