Defining your
target market

A central goal for most emerging technology ventures is to develop clear market and customer focus. This can be challenging. There may be many potential markets for your products and services. Through our work with dozens of early stage technology companies, we have developed a simple but powerful model for market definition that comprises three steps:

• Identify and evaluate a range of market options.
  The first step is to assess the size, nature of demand and vendor ecosystem (competitors and channel participants) in a range of potential markets. The goal is to develop a clear understanding of the attractiveness of each market as a basis for a priority ranking of your possible market options.



• Understand customer needs in your target market.
  The next step is to develop an in-depth understanding of customer needs within your best market option. Begin by clarifying exactly who is the customer. Next, develop a deep understanding of both core needs (what the customer needs to do) and buying needs (the customer’s ability to buy). Both these sets of needs must be addressed in order to secure a purchase order from the customer!



• Understand customer options – your competitors. Finally, you need to understand customer options from the customer’s perspective. Frequently this is an uncomfortable exercise for new venture managers, who are reluctant to recognize that customers do have other viable options to solve the problem. Identify and analyze at least half a dozen or so direct competitors, so that you can refine your offering and positioning to clearly present your advantages against each competitor.

In this article, we will discuss in more depth these three components and the role they play in clearly defining your target market

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Insights is Blue Mine Group’s monthly thought leadership publication on innovation strategy. 

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Join us for our next webcast!

Winning customers through market focus
January 9th, 2008 
11:00am

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Explore this month’s topic in depth with the following books:

Wharton on Managing Emerging Technologies

Finding Fertile Ground: Identifying Extraordinary Opportunities for New Ventures

Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant