Targeting Guide #1

Consider two factors when selecting market segments to target:  (a) the attractiveness of the segment and (b) your company’s and brand’s strengths and weaknesses.

The above guide is found in Philip Kotler and Kevin Keller’s classic MBA marketing text, Marketing Management, in much more formal prose than this guide.

From experience, most marketers focus on the attractiveness of the segment and minimize their company’s and brand’s weaknesses.  You need to focus equally on both.  It is very difficult – and sometimes beyond the ability of the marketing manager -- to eliminate the weaknesses of the company and/or brand.  For example, if a company has a poor supply chain which results in inconsistent customer delivery and low fill rates, much work is needed to correct this weakness.

A good way to assess which market segments to target is through is through a SWOT analysis.  A classic SWOT analysis consists of strengths and weaknesses and opportunities and threats.  Strengths and weaknesses are internal to the company or brand; whereas, opportunities and threats are external to the company or brand.  A SWOT analysis can be used as a thinking tool for targeting market segments.

The back side of the SWOT analysis -- opportunities and threats -- are, respectively, the attractive aspects of a market segment and the negative aspects of a market segment.  As an example, most marketers are under pressure to constantly increase category share.  Large market segments where increased category share can be more easily accomplished represent opportunities for those marketers.  Conversely, smaller market segments may represent a threat to the marketer who is after large category share.

The front side of the SWOT analysis -- strengths and weaknesses -- are the strengths and weaknesses of your company and/or brand.  Be careful in your analysis of strengths and weaknesses.  You are probably proud of your employer; and, unfortunately, this colors your judgment.  You may proudly point out that your company spends more on research and development than your competitors.  Spending more on research and development, in and of itself, is not a strength.  If your research and development expenditures result in marketable products that create value for your target customers, then the ability to create those products is a strength.  If not, your spending on research and development may be a contributor to a weakness – you may be the high cost producer in the category.  Similarly, a company’s  efforts to protect the environment are certainly admirable.  However, in selecting target market segments, they are not a company or brand strength unless they motivate the target customer to consider the purchase of the brand.

To aid you in your SWOT analyses, a SWOT Analysis template is available for the asking.  When you use this template, remember -- strengths and weaknesses are internal to the firm or brand; opportunities and threats are external to the firm or brand.