Go To Market Strategy

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Ch3 Targeting the right markets
Go To Market Strategy
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Overview

• Review of Chapters 1 2

• 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

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Review (Ch 1) Go-to-market Strategy
Choice and alternative increasing channel
availability
Total Customer Experience
Purpose

• Attract and retain the
• most desirable customer
• Increase sales with lower
• cost

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• 4 ingredients of a winning go- to market
  strategy

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Review (Ch 2) The ten commandments of going to
market

• Go-to-Market strategy must start with the customer

• Exact information can gather from customer
  product, channel, value proposition, markets

• Aggressive use of low-cost channels will have a
  dramatic impact on profits

• How you sell has to fit with what you are selling

• Customer, Economics, Complexity

• There is Always a tradeoff between market
  coverage
• and control

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

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

• 3 reasons why e-channel is not work

• Getting channel cooperation is more important
  than
• preventing channel conflict

• You cannot be everywhere at all times for every
  customer

• The business model has to be sound for a
  go-to-market
• strategy to succeed

• 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

• To win big a go-to-market strategy must be
  innovative
• and different

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Targeting the right markets
Chapter3 Targeting the right market

• Its impossible to choose a successful mix of
  channels until you determine which markets those
  channels are supposed to reach. Pg73

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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
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(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

New target markets
No experience No understanding
(Aug 2001) Sales 28M
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The Four Pitfalls of Market Targetingand How to
Avoid Them

• Trap 1 Chasing untried and unproven blue sky
  marketsand 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

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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???
• 1Customers New customers in new
  markets are difficult to reach
• 2Products 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

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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 3rd 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 3rd party research,

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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

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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
• The sales force
• People who deal with partners or distributors
• People who know a lot about the competition

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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

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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

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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!!!

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3. Evaluate targets against criteria

• Evaluate using a scoring metric
• May not find information for all criteria
• Be ready for information gathering
• This step should produce 5-10 good markets

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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

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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

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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!!!

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Best Practice Marriott International

• Thorough and creative in identifying new markets
• Travelers are diverse and cannot be served by a
  one-size-fits all brand
• Scientific approach to market evaluation
• 13 stage evaluation process that includes
  competitor analysis, fit with corporate goals,
  and mathematical scoring to rank opportunities
• Ongoing market-tuning

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What we learned

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

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Critique

• Tool for continuous market evaluation?
• Permanent cross-functional team

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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.