Marketing Strategy and Competitive Positioning pdf ebook

CHAPTER 9 SELECTING MARKET TARGETS
into consideration. Of prime importance is the scope for building a valuable and defensible 
position for the company in that segment. This will also require a clear identification of the 
company’s strengths with regard to the proposed segment.
9.3.5 Making the criteria clear and explicit
We made the point earlier that the factors making a market or segment attractive to a 
particular company are likely to be unique to that company, rather than simply reflecting 
a general checklist of the type discussed previously. We also made the point that it is likely 
that the direction of a decision criterion will also vary – high-growth markets are attractive 
to some companies and unattractive to others in the same industry.
It is also the case that some of the real criteria for evaluating market/segment attractive-
ness may be highly subjective and qualitative. For example, a brewery evaluating alternative 
markets for its by-products identified the criteria of market attractiveness as:
● 
Market size: it defined a minimum market value to be of interest.
● 
Market growth rate: moderate growth was preferred (it did not want to invest large 
amounts in keeping up with a by-products market).
● 
Low competitive intensity: it wanted to avoid head-on competition with others.
● 
Stability: it wanted a stable income flow.
● 
Low profile: it did not want to invest in any area that would attract media criticism, or 
regulatory activity by the government.
What we see is a mix of the qualitative and the quantitative, the objective and subjective. 
None the less, these are the issues that matter to that management group. There is much 
advantage in making the real criteria as explicit as possible, notwithstanding that some 
reflect corporate culture and management preferences rather than economic market analysis.
Indeed, the Virgin Group typically makes explicit the criteria that make further markets 
attractive to Virgin. The head of corporate development, Brad Rosser, states that Virgin 
will invest in a market only if it meets at least four out of the following criteria:
1 
The products must be innovative.
2 
They must challenge established authority.
3 
They must offer customers good value for money.
4 
The products must be of high quality.
5 
The market must be growing.
This describes Virgin’s original mission of offering ‘first class at business-class prices’ 
and then applying the brand to new market opportunities.
9.3.6 The impact of change
It should also be remembered that nothing is static – things change, and sometimes they 
change rapidly in a number of ways:
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