TARGETING

“Only through focus can you do world-class things, no matter how capable you are.”
- Bill Gates
 5 – DEVELOP VALUE PROPOSITION
MATRIX
Customer
Segment
Seema A car fleet Deepak Coal Plant Sheela Data Center
Shyam Building Naresh Truck Driver
Use / Applications owner operations manager manager Operations
manager
Convert exhaust Increase power
Saves 20% fuel Lower power Saves 20% fuel
waste heat to production by
cost consumption 20% cost
power 10%
Convert Hot Lower power Increase power
Water to Power consumption 20% production by 5%
Increase power Lower power
Convert metal Save 10% fuel production by consumption by
heat to power cost 10% 20%
Convert Sunlight Save 5% fuel cost
to Power
Convert Breat Save 5 % fuel cost
Heat to Power
TARGETING

 Definition: process of evaluating and prioritizing market segments in terms of

 Attractiveness to company
 Company strength / ability to serve the market

 Ultimate Question: Can we capture value and win / achieve leadership?

 Targeting Five-Step Process
 Develop Factors for Targeting
 Assign weight to factors
 Develop Rating System
 For each application (Use) develop Application Targeting Matrix
 Develop summary targeting matrix
DEVELOP TARGETING FACTORS (BASES)
 Targeting factors are (A-priori & Objective) Criteria by which you can measure
 The attractiveness of the segment
 The strength and capability of the organization / product to deliver on customer needs
 Example of targeting factors
 Profitability potential
 Do we have bargaining power?
 Is the market large (or small) enough?
 What is the growth potential?
 Competitive advantage analysis
 Your company’s strengths / weaknesses vs. existing and possible competitors
 Possible retaliation by competitors
 Tech adoption practices
 Use complementary technology
 Knowledge about space
 Early adapters?
 Timing right?
 Is customer ready to adopt?
 Is it clear and present pain?
 Develop your targeting factors BEFORE making a decision!
EXAMPLE: GENENTECH “CRITERIA FOR DRUG DEVELOPMENT”

 Scientific Confidence
 Fit current medical understanding
 Supported by lab experiment
 Critical Medical Need
 Critical disease or ailment
 Unmet by existing medical technologies
 Significant Market Opportunity
 Adequate Market Protection
 Patentable
 Protectable
 Reasonable Manufacturing Economics
CISCO’S 5 QUESTIONS FOR “NEXT BILLION $ BUSINESS

 Does it address a real pain point?

 Will it appeal to big enough market?
 Is the timing right?
 Would we be good at it ( If we pursue the idea)?
 Can the opportunity be exploited long term?
 Or will this turn into a commodity quickly?
2 – ASSIGN WEIGHT TO TARGETING FACTOR

 Weight reflects the importance of factor relative to one another

 Example of weighting factors
 Profitability potential – 40%
 Competitive advantage – 30%
 Tech adoption practices – 20%
 Product sales characteristics – 10%

 Is total available market > 100M Y/N

 Does market have a clear leader? Y / N
 3 – DEVELOP A RATING SYSTEM

 Develop a consistent rating system based on

 Attractiveness to company
 The customer pain / need / Opportunity
 The company’s ability to deliver on the benefits / value proposition

 Here’s a sample rating system

 10 – Incredibly attractive
 7 – Very attractive
 5 – Average /Ok
 3 – Unattractive
 1 – Incredibly unattractive

 Have a multi-functional team to assign ratings

 4 – DEVELOP APPLICATION TARGET MATRIX
Weight Ratings

Target Basis % Suburban Office Building Independent Truck Coal Plants Data Centre
Car Owner Ops Manager driver Ops Manager Ops Manager

Lack of dominant provider 20% 7 6 7 7 8

Market size 20% 10 10 8 10 10
Channel to market 10% 3 4 4 8 10
Can develop whole product 30% 8 8 8 9 8
Can leverage into other 20% 9 9 9 10 9
segments
100% 7.9 7.8 7.6 8.9 9.1
 5 – DEVELOP SUMMARY TARGETING MATRIX
Segments

Applications Suburban Car Office Building Independent Coal Plant Data Centre
Owner Ops Manager Truck Driver Ops Manager Ops Manager

Convert exhaust waste heat to power 7.9 7.8 7.6 8.9 9.1
5.6 7.7 3.4 8.6 9.0
Convert Hot Water to Power
6 5.6 7.6 8.1 9.8
Convert metal heat to power
6.7 7.7 6.3 6.8 7.5
Convert Sunlight to Power
5.4 3.2 6.5 3.4 3.2
Convert Breat Heat to Power