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Why targeting is important

We discussed the four criteria to select a target market. However, this does not mean that we are ready to position ourselves in that market.

Entrepreneurs first need to think how to position themselves in that market given the fact that there will always be competitors who will compete for fulfilling the needs of the customers that you have targeted. Remember that we discussed the differences between EasyJet and KLM in the video. At the core, both airlines offer the same service, that is bringing passengers from A to B. However, both airlines are positioned in totally different markets with different customer needs and price levels. Imagine what would have happened if these airlines would not have positioned themselves thoroughly in their own target market?

The table below makes clear what the differences are between a business that did not pay serious attention to targeting and positioning and one that did by asking specific questions. Look at the differences for each of the three value propositions possibilities and see if they match your ideas about how to position your value proposition. Remember that successful entrepreneurs are most busy with creating a resonating focus with their customer based and adjust their value proposition to the developments in their markets.

Consists of: All benefits customers receive from a market All favorable points of difference a market offering has relative to the next best alternative The one or two points of difference (and, perhaps, a point of parity) whose improvement will deliver the greatest value to the customer for the foreseeable future
Answers the customers question: “Why should our firm purchase your offering?” “Why should our firm purchase your offering instead of your competitor’s?” “What is most worthwhile for our firm to keep in mind about your offering?”
Requires: Knowledge of own market offering Knowledge of own market offering and next best alternative Knowledge of how own market offering delivers superior value to customers, compared with next best alternative
Has the potential pitfall: Benefit assertion Value presumption Requires customer value research

Table as published by Anderson, Narus and Van Rossum (2006).


Anderson, J. C., Narus, J. A., & Van Rossum, W. (2006). Customer value propositions in business markets. Harvard Business Review, 84(3), 90-99.

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