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How Do I identify a Target Market?

The fine chemical and surfactants product divisions of a $1 billion specialty chemicals company sought to fund a marketing development program that would identify new products to develop. Explore how market analysis could help this organization understand their target market.

The Problem

As the client did not sufficiently understand the targeted market, it was uncertain whether to fund this development program. Therefore, an understanding of the market potential for a new entry, the potential development costs and risks, and the potential financial returns were needed before the divisions could determine whether to fund the program.

The Approach

A multifunctional team was formed that included the consultants and the client company. This team studied the agriculture sufactants value chain to determine market segment needs and whether there was a potential market entry point.

The Results

An in-depth understanding of the agriculture surfactants value chain determined, and the client understood, that there was no room to successfully bring a “me-too” product to this market. There was, however, an unfulfilled need for a high performance surfactant. The team narrowly focused the client’s development program on a single “test case” surfactant within a broad range of new surfactants. A “make-or-break” efficacy study, in concert with the primary market target, was conducted. The outcome was that although the client’s potential new surfactants could bring some value to the targeted segment, the value added would not support the development costs. The client divisions saved multiple millions of dollars that could have been spent unsuccessfully pursuing a doomed strategy.