How do you manage risks in market targeting?

1 Market attractiveness risk

This is the risk of choosing a target market that is not profitable, sustainable, or accessible for your business. It can result from factors such as low demand, high competition, legal barriers, or environmental changes. To avoid this risk, you need to conduct a thorough market analysis and evaluate the potential and attractiveness of each segment, using criteria such as size, growth, profitability, and compatibility with your objectives and capabilities. You also need to monitor the market trends and dynamics regularly, and be ready to adjust your targeting strategy if needed.

2 Market coverage risk

This is the risk of missing out on opportunities or losing customers by focusing on a too narrow or too broad target market. If you target a too narrow segment, you may limit your sales potential, reduce your economies of scale, and expose yourself to competitive threats. If you target a too broad segment, you may dilute your positioning, increase your costs, and fail to meet the specific needs of your customers. To avoid this risk, you need to balance your market coverage and selectivity, based on your resources, differentiation, and competitive advantage. You also need to consider the benefits and costs of different targeting strategies, such as undifferentiated, differentiated, concentrated, or micromarketing.

3 Market alignment risk

This is the risk of mismatching your marketing mix with your target market's expectations, preferences, and behavior. It can result from factors such as poor research, inaccurate segmentation, ineffective communication, or inadequate feedback. To avoid this risk, you need to understand your target market's needs, wants, and values, and design your product, price, place, and promotion accordingly. You also need to test your marketing mix before launching it, and measure its performance and satisfaction after launching it. You also need to keep your marketing mix updated and relevant, and respond to your target market's feedback and suggestions.

4 Market ethics risk

This is the risk of harming your reputation, credibility, or social responsibility by targeting a market that is controversial, vulnerable, or exploited. It can result from factors such as unethical practices, deceptive claims, unfair discrimination, or negative externalities. To avoid this risk, you need to follow the ethical principles and standards of your industry, and respect the rights and interests of your target market and other stakeholders. You also need to assess the social and environmental impacts of your targeting decisions, and avoid any actions that may cause harm, offense, or backlash. You also need to communicate your values and intentions clearly and honestly, and build trust and loyalty with your target market.

5 Market contingency risk

This is the risk of facing unexpected events or crises that may disrupt your targeting strategy or affect your target market's behavior. It can result from factors such as natural disasters, pandemics, wars, political changes, or technological innovations. To avoid this risk, you need to plan ahead and anticipate the possible scenarios and outcomes of your targeting strategy, and prepare contingency plans and resources. You also need to be flexible and adaptable, and adjust your targeting strategy quickly and effectively if the situation changes. You also need to communicate with your target market and other stakeholders, and provide support and reassurance if needed.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?