Target the Right Market
A software company debates its strategic focusby Jill Avery and Thomas Steenburgh
SparkPlace A two year old provider of online marketing software.
Software lets customers manage and measure the effectiveness of their marketing approach.
Software available for a monthly fee Software available for a monthly fee
Limited resources
Focused on growth
Marketing DilemmaSams Marys
Size < 20 employees 20-100 employees
Potential market size 1.3 million
SamsPros Cons
1.3 million potential customers
$1 Marketing = $5 profit
Lower customer retention
Profits are only $10k $1 Marketing = $5 profit
Less complex software needs
Less competition from other marketing firms
Sales cost are $1000
MarysPros Cons
Longer customer retention
$50k profit for each
More invested in product;
Less than million potential customers
$1 Marketing = $2 profit More invested in product; easier to upsell
$1 Marketing = $2 profit
More complex software needs
More competition in the space
Sales costs are $5,000
Target Both MarketsPros Cons
Greater potential market
Greater overall profit potential
Spreading resources thin
More intense marketing needspotential needs
More intense development needs
WHICH MARKET WOULD YOU TARGET!
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