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Home | TARGETNG - A STRATEGIC DECISION, NOT A VOLUMETRIC

Sunday, March 29, 2009

 

 

TARGETING: A STRATEGIC DECISION, NOT A VOLUMETRIC ONE

 

A true story: The Frito-Lay route salesman in Western Florida heads out from the distribution center before sun-up. His route each day typically includes anywhere from ten to fifteen stops, mainly at chain and independent grocery stores and at convenience stores. Of course, the idea inherent in any direct-store-door (DSD) delivery system is, within a given territory, to cover as many distribution outlets for Frito-Lay brands as possible…so that, literally, their snack brands can be at “arm’s reach” of any potential consumer. But this day the salesman speeds past one or two “mom & pop” outlets (that also carry Frito-Lay brands), prompting his guest rider that morning to ask, “Why aren’t we stopping to service those accounts?” His reply: “Servicing those accounts would take about forty-five minutes each, but with very little sales for the time invested; whereas, if I spend forty-five minutes at the grocery up ahead, I’ll realize a considerable return on my (really, the Company’s) time investment.”

 

On the surface, it would seem that the salesman in this story is primarily interested in gaining the most volume—suggesting that he has made a conscious, “volumetric” choice or decision in which accounts to service and which ones to bypass. But, examined more closely, he has really made a return-on-resource investment choice or decision…which has to do with more than simply maximizing the Company’s volume. He is literally thinking more strategically: recognizing that every day has its limits, that not all accounts are created equal, and that concentrating the Company’s resources (his time!) is a more efficient way to build the business.

 

This story comes readily to mind whenever we hear our clients relate their experiences in proposing a brand positioning in the boardroom, and of having their General Manager say something predictable like, “We need more volume, so make your Target bigger.” Unlike the route salesman, the General Manager seems not to understand that every company has its limits (no one, not even The Coca-Cola Company, has the required resources to effectively target everyone); that not all consumers or customers are of equal value and are therefore worthy of equal investment; or that concentrating the Company’s resources leads to a better return on investment. In short, the General Manager who thinks this way is mis-targeting: regarding the determination of a Brand Positioning Target as a volumetric choice rather than as a strategic-investment choice.

 

In fairness to some of these “broader target” thinking General Managers, though, there are some targeting shortcomings endemic to many marketing organizations—shortcomings that make going broader a relatively easy move. Here are some of the most common ones:

 

  • Data and even qualitative information on potential target options are often limited to things like consumption patterns by age or to source-of-volume/brand switching studies; what’s lacking that would greatly help differentiate and discriminate among possible target groups is substantive psychographic and attitudinal data.
 
  • Within both the line marketing and the market research functions there is a generally poor or weak segmentation effort—in the form of either a lack of legitimate market segments (defined by data!) and/or a lack of clever, creative thinking regarding potential market segments…for example, relying solely upon the way a supply firm like IRI defines the market segments for all their clients within the category (rather than hypothesizing alternate ways to conceive of market segments).
 
  • Marketing teams use impaired, “limp” language to define their proposed positioning target…with clichés such as “active adults,” and “health-concerned people,” that bring nothing enlightening (or differentiating) to the party; and also “fat” words and phrases like “efficacy-driven” (what specific aspect of efficacy do we mean anyway?). This kind of language actually encourages going broader in selecting a positioning target rather than defining one more precisely.
 
  • Perhaps the most telling shortcoming of all, marketing teams fail to explain who the brand is not targeting as well as who the brand is targeting, with rationale for both. Just as the route salesman had a ready rationale for not stopping at certain mom & pop’s along his route, so do marketing teams need to have a rationale for the targets (the market segments) they are not including in the brand’s positioning.
 

What can be done to overcome these kinds of endemic shortcomings? Well, we don’t presume to have all the answers, but in this week’s Boats & Helicopters we can offer a few sure-fire steps to make determining the positioning target more of an informed, strategic decision than simply a “make it bigger” volumetric one.

 

BOATS & HELICOPTERS:

 

  1. First, articulate in a precise, measured way the potential target segments within the market.

 

  1. Next, honestly assess each segment versus the brand’s promise; identify those target segments which the brand cannot win with—a kind of process of elimination.

 

  1. Write a “contra-Target” statement that clearly describes who the brand is not targeting (with rationale).

 

  1. Of the remaining target segments, identify the single, most promising one or two (the “bulls-eye”), given the brand’s real or perceived differentiated promise.

 

  1. Articulate a complete, 7-part Strategic Target Statement for this “bulls-eye”: Demographics, Psychographic Label, Driving Attitudes, Occasions (or if applicable, Condition), Current Category Usage/Non-Usage with Dissatisfactions, other “Telling Behaviors”, and Needs—rational and emotional.

 

Once you have completed all of these steps, there is one other thing to consider: take quite literally the notion of going with a strategic target. Where we come from, “strategic” always means “having or having to do with a competitive advantage.” In keeping with this notion, then, ask yourself how your brand’s target is differentiated from the competition. Look around and you’ll start to see a good number of brand success stories--made by having a target consciously different from a key competitor’s. Take MasterCard’s “credit card pragmatist” target, which until recently has been quite a different person than Visa’s longstanding “credit card elitist” target. Or take Mac’s differentiated target versus PC’s target. Or Virgin Atlantic’s versus British Airways. And so on. Now that’s strategic targeting!

 

Richard Czerniawski & Mike Maloney

 


Richard Czerniawski


430 Abbotsford Road

Kenilworth, Illinois 60043

tel 847.256.8820 fax 847.256.8847


reply to Richard:

rdczerniawski@cs.com or

richardcz@bdn-intl.com

 

 

Mike Maloney


1506 West 13th

Austin, Texas 78703

tel 512.236.0971 fax 512.236.0972


reply to Mike:

mikewmaloney@cs.com or

mikemaloney@bdn-intl.com

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