Go To Market Strategy Ch 3 Slides (Steve).ppt

7/28/2019 Go To Market Strategy Ch 3 Slides (Steve).ppt

1/25

Ch3: Targeting the right marketsGo To Market Strategy


2/25

Overview

I. Review of Chapters 1 & 2

II. Chapter 3: targeting the right markets1. Common targeting pitfalls

What not to do: Enconix2.Six steps to successful targeting

What to do: Marriott International3. What we learned4. Critique5. Questions


3/25

Review: (Ch 1) Go-to-market Strategy

Choice and alternative: increasing channel availability

(P.7) Today, its no longer just about whatyou sell;its also about howyou sell it

Go-to-market strategy:

A game plan for reachingand serving the rightmarkets, through rightchannels with the rightproducts and the right

value proposition

Total Cus tom er

Experience

Purpose

Attract and retain the

most desirable customer

Increase sales with lower

cost


4/25

4 ingredients of a winning go- to marketstrategy

Ch6:

The productand

The value

proposition

Ch5:Channels

and

Partners

Ch3:Market

Ch4:Customers


5/25

Review: (Ch 2)

The ten commandments of going to market

I. Go-to-Market strategy must start with the customerExact information can gather from customer:product, channel, value proposition, markets

II. Aggressive use of low-cost channels will have adramatic 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 coverageand control

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


6/25

3 reasons why e-channel is not work

VI. Getting channel cooperation is more important thanpreventing 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-marketstrategy to succeed

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

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-tomarket strategy:

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


7/25

Targeting the rightmarkets Its impossible to choose a successful mix

of channels until you determine which

markets those channels are supposedto reach. Pg73

Chapter3: Targeting the right market

Ch3:Market


8/25

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 andinformation technology requirement of their

market : (1990s) ERP SCM CRM

Developed new software and service to meet theexpanding needs

What not to do: Enconix


9/25

(1998) Change the direction:Y2K focusSoftware 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

Change the direction: PRM focusY2K specialists PRM consultants

Consumer goods manufactures Food distributor Computer hardware vendors

Insignificant and biased marketing research

New target markets

(Aug 2001) Sales: $ 28M

=No experience

No understanding


10/25

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, whichoften 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 internalsources of information when evaluating new

market opportunities


11/25

Market targeting trap #1

Chasing untried and unproven blue sky marketsandneglecting solid, available business thats close to home

Usually, the pursuit of entirely new market opportunities is the slowest, most expensive, leasteffective, 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 uncharted2: 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 couldever handle


12/25


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 inflatedestimates

At the minimum, get multiple, independent sources of information whenevaluating 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 marketresearch by doing some of the work yourself

The bottom-line is that you should never make the decision to participate in amarket based solely on the basis of 3rd party research,


13/25


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


14/25

Marketing target trap #4

Ignoring crucial internalsources 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 toignore

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


15/25

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


16/25

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


17/25

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!!!


18/25

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

marketsMarket

evaluation

criteria

Fortune

500

Small

Business

High

tech

vertical

CoreCriteria

Market Size *** ** **

Market

growth rate

** *** (?)

Secondary

Criteria

Channel

availability

*** ** **


19/25

4. Validate markets with key

prospects

Purpose: final check of your best

potential markets

Recommendation:

Call 30 customers in target marketsover 3-4 weeks

Measure how receptive they are

Check for any potential sales

Produces group of attractive

markets ready for you


20/25

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


21/25

6. Fine-tune markets over time

Market conditionswill 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 viewof their target markets, and so should you!!!


22/25

Best Practice: Marriott International

Thorough and creative in identifying newmarkets

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 competitoranalysis, fit with corporate goals, and mathematical

scoring to rank opportunities

Ongoing market-tuning


23/25

What we learned

Know thyself

Look toward your current customer base forgrowth opportunities

Formulate growth strategies that build on your

strengths


24/25

Critique

Tool for continuous market evaluation? Permanent cross-functional team


25/25

Questions

How can focusing on existing customers help a

company achieve growth?

Opportunity to increase share of customer, informationconcerning 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.

Go To Market Strategy Ch 3 Slides (Steve).ppt

Documents

Transcript of Go To Market Strategy Ch 3 Slides (Steve).ppt