- The target market size and buying power must be measurable
- The chosen segment must be sufficiently large to be profitable
- There must be a way to communicate with/to the segment
So often in student projects the qualitative description is well detailed but the quantitative aspects are neglected. Despite my regular reiteration of the importance of numbers in marketing, this quantitative argument gets overlooked. Apparently it is not just students that make this error.
Last week’s episode of “The Dragon’s Den” (Season 4, Episode 3) on CBC opened with an entrepreneur looking for investment in her environmentally friendly reusable diaper business.
She didn’t have the market numbers when the “Dragons” asked for them. Thanks to the video links on the CBC Dragon’s Den, I was able to let the Dragons drive the point.
While the video played, I noted key pieces of info on the board to jog memories and serve as points of discussion afterward. Key questions for discussion included:
- Using the four segmentation variable categories of demographic, psychographic, geographic and product related factors, how would you describe the target market for the proposed product?
- What target information was missing from the presentation?
- How could an entrepreneur find and/or estimate these figures?
- Does the target meet the criteria for target market selection?
- How could a marketer communicate with this segment?
- How would an entrepreneur determine if this segment was sufficiently large to be profitable?
In addition to the segmentation discussion, some students wanted to discuss the valuation of the business, the potential distribution strategies that could have been appropriate to this product/company, the product positioning, sustainable competitive advantage and feasibility of the product idea, and how a marketing plan would have strengthened this pitch. All concepts I was happy to elaborate on as the teachable moments presented themselves.
So how did it go?
Many students have never watched the show before and were shocked at how up front the pitch review process was. Gasps, giggles, sighs and cringes escaped as they watched the pitch and its review. They were quite taken with the business version of reality TV! They seemed to identify with the entrepreneur and wanted to help her. Better than that – for me at least – they could have! They saw that the ideas, principles and practices we’ve discussing in class, and that they’ve been applying to their projects, would have really helped this business. They knew they would have had the answers.
When projects are submitted at the end of the term, I’m sure there will be target market metrics. Many thanks to the Dragons!