This article is an excerpt from the Shortform book guide to "Playing To Win" by AG Lafley. Shortform has the world's best summaries and analyses of books you should be reading.
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Are you trying to find your target audience in marketing? How do you choose the demographic that fits you the best?
In their book Playing to Win, former CEO A.G. Lafley and consultant Roger Martin explain that there are five questions you should ask yourself when choosing your target market. They also share the most common pitfalls and advice on how to avoid them.
Here’s how to choose the right target market for your business.
Find Your Target Market
In their book Playing to Win, authors Lafley and Martin ask: On which battlefield will your company fight? Or, what audience do you want to target? This can include fighting for particular demographics, being on specific media platforms (websites, TV networks, or magazines), or in ideal geographic markets. As we’ll discuss, where you decide to play should be based on the state of the industry you’re competing in and your own company’s particular strengths.
(Shortform note: In Blue Ocean Strategy, Renée Mauborgne and W. Chan Kim compare markets to areas of the ocean. A “red ocean” is a market that’s already crowded, where competition is fierce and success is unlikely—imagine blood in the water, and the predators that it will attract. Conversely, a “blue ocean” is a fresh and new market where there’s little or no competition. When developing your business strategy, it’s best to look for blue oceans rather than trying to compete in a crowded market.)
Choosing Your Targets
Lafley and Martin say there are a variety of choices to make regarding where and how you will compete. To identify your target audience in marketing, they offer a few basic questions to consider, such as:
- Region: Where are you competing?
- Product: What are you offering your consumer?
- Consumers: Who are you targeting?
- Distribution: What strategy will you use to deliver to your consumers?
- Production: How much of the production will you be responsible for?
In answering these questions, think strategically. Don’t dismiss entire industries or demographics because they seem unattractive at first glance—there might be a small niche you can fill, or an unexpected tactic you can use to break in. Conversely, don’t rush too quickly into what you perceive as an untapped market; there may already be a strong competitor catering to that market in a way that you don’t immediately see or recognize.
Finally, the authors note that some questions about your target market are more important than others. The industry, the size of the company, and how long the company has been around all contribute to which questions are most important. For example, large corporations might have to answer questions about which distribution companies are best in different parts of the country (in other words, how they’ll get their products to their target markets), or whether they should take their business international. Meanwhile, a long-standing company might consider broadening its target audience if its products are suddenly struggling in the company’s current market.
(Shortform note: Before starting a new business venture, entrepreneurs should ask additional questions, such as, “Will this be sustainable?” When picking your playing field, it’s important to choose one that you can not only break into, but can continue to succeed in. For example, if your strategy falls apart the moment you have serious competition in your chosen market, it’s not sustainable and therefore it’s not a good playing field for you. Similarly, if the costs of production, distribution, or advertising are unsustainable, then you need to target a different market.)
Avoid Playing Field Pitfalls
Lafley and Martin warn of three common pitfalls when considering what playing field to choose and how to choose it:
Pitfall #1: Not choosing at all—All companies need to be specific about their demographic choices, because trying to be different things to different people is a recipe for disaster. For instance, it’s very difficult to capture the attention of a young American man and an aging French woman at the same time. So, based on your company’s capabilities, decide what specific age groups, geographies, or channels (for example, mass merchandise vs. luxury) you want to cater to.
In other words, choosing where not to play is just as important as choosing where to play.
(Shortform note: One way companies make this mistake is by selling what marketing guru Seth Godin calls “mass products”—that is, products designed to appeal to everyone. In Purple Cow, Godin says that such products are bland and boring by design, because their goal is to be inoffensive rather than extraordinary. In short, the more you try to broaden a product’s appeal, the less appealing it actually is. This also plays into Lafley and Martin’s point about competing rather than dominating: Mass products try to play by the same rules that everyone else is playing by, while extraordinary products dominate the game by offering something new.)
Pitfall #2: Spending your way out of a bad situation—If your current playing field isn’t working out, don’t just spend more money and hope that somehow fixes the problem. Instead of funneling more resources toward a problem, you need to either shift your focus to a different market or fix the problem you’re having in the current one.
(Shortform note: In Rework, David Heinemeier Hansson and Jason Fried also caution against throwing money and resources at a problem in an effort to fix it. In fact, they suggest the opposite: Cut back on what you’re devoting to that particular issue, because that will force you to make difficult but crucial decisions about how to proceed. For example, you might find it necessary to reduce your workforce, sell off some resources, or even abandon a market entirely.)
Pitfall #3: Believing that choices are final: Some companies think there are certain places and ways that they have to compete. However, this isn’t true in practice: Many successful companies can and do change their playing fields when needed. For example, Starbucks started out selling coffee beans and espresso machines in the 1970s, then shifted in the 1980s to their current model of acting as a pseudo-European cafe—a move that led to Starbucks dominating the coffeehouse market today.
(Shortform note: In Rework, Hansson and Fried warn that one of the worst things a business can do is become paralyzed by indecision; they say that making a bad choice is better than making no choice. One way to avoid paralysis is by remembering, as Lafley and Martin say, that your decisions don’t have to be final. If it turns out that you did make a bad decision, learn from that mistake and make a different choice for the future.)
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Like what you just read? Read the rest of the world's best book summary and analysis of AG Lafley's "Playing To Win" at Shortform .
Here's what you'll find in our full Playing To Win summary :
- Why the cascade strategy will help you become victorious in your chosen field of play
- Why you should make every choice with the purpose of not just competing, but winning
- How to develop a system of decision-making for your company
