Identify your target-market mix


  • Analyst Reports
  • Saturday, 09 Mar 2019

LAST Sunday, I met up with two professors from the Medical Faculty of Universiti Malaya.

These two effervescent ladies want to save the world. Their dream is to eliminate cervical cancer by providing free cervical screening services to Malaysian women, prioritising the under-screened population – the B40 group.

They plan to set up a foundation to raise funds from donors, corporates and individuals. My only advice to them was that it would be difficult to rely only on donations year after year. They would have to identify the different target segments, and charge those that can afford to finance those that are not able to.

They need to understand about different target segments, a logistical model to deliver their services and set up a viable financial model for the foundation.

I agreed to help them with their initial set-up because of their passion for the mission, their holistic values and their contribution to help Malaysian women, irrespective of race and religion.

With limited funding, social enterprises and young entrepreneurs must identify the market segment that they want to serve. Market segments based on demographic criteria like age, gender, income, education, nationality, ethnicity and religion.

Once you have identified your specific target-market mix, you need to devise a practical action plan based on your financial resources and organisational capabilities. I always advise small startups to focus their main competitive advantage on a narrow and specific target market in a small geographical area.

Only when they have been reasonably successful should they expand to another area whose population mirrors their target segment mix.

After building market share in one market, make sure you keep your gains and then only move to another market. This is a simple steady growth strategy, building block by block. You cannot grow your market share by losing what you have gained when you spend all your resources to fight in another market segment.

Always gain, retain, gain in another market, retain and repeat this exercise until you have achieved market leadership.

Even in politics, understanding market segmentation (voters) is crucial in ensuring long-term success for the political parties. The recent Semenyih by-election is an example.

The Pakatan Harapan candidate lost by 1,914 votes to the Barisan Nasional candidate who had the support of PAS voters. The Pakatan leaders blamed the loss on the swing of Malay voters to Barisan/PAS.

In the 14th general election (GE14), Pakatan had 23,428 votes whereas in the recent by-election, its votes went down to 17,866, a shortfall of 5,562 votes. Barisan/PAS, meanwhile, saw their combined votes going down from 21,430 in GE14 to 19,780 votes, a shortfall of 1,650 votes.

The total registered voters in Semenyih was 54,503, with Malays making up 67.7% of the voters, Chinese 16,7%, Indians 13.7% and others, 1.9%. The total non-Malay voters was 17,604.

The voter turnout was 73.3 % (39,218) in the by-election versus 87.4% (46,572) in GE14, which is a shortfall of 7,354 voters. It was reported that the Malay voters turned out in high numbers, as they were more motivated to vote. So, the shortfall in voters in the by-election was mostly due to the non-Malay voters staying away.

If only an additional 11% (1,936) of the non-Malay voters had voted, Pakatan would have won the by-election. Statistically speaking, Pakatan was let down by the non-appearance of the non-Malay voters who had voted for it overwhelmingly in GE14.

From a political viewpoint, why did the non-Malay voters stay away from the by-election in such big numbers? What had caused such a big shift in sentiment within 10 months of Pakatan’s rule?Open protest

Is it because in the last three months, Prime Minister Tun Dr Mahathir Mohamad and Parti Pribumi Bersatu Malaysia have taken on board ex-Umno MP’s despite the open protest by its coalition partners? Is it because of the change of Bersatu’s strategy to champion Malay rights over the original Pakatan manifesto of multi-racial policies?Or is it that the non-Malay voters are disillusioned by the non-recognition of the ICERD and UEC certification? Or are the Chinese voters disappointed with our Finance Minister for cutting allocations to University Tunku Abdul Rahman, or has DAP simply become arrogant because it is now in power?

Are the voters disillusioned with the PKR leadership infighting? Will Datuk Seri Azmin Ali cross over to Bersatu? When will Pakatan fulfill its manifesto?

From the marketing viewpoint, Pakatan won GE14 with the solid backing of the non-Malay and moderate Malay voters. Dr Mahathir did convert a few per cent of Malay voters that caused the tipping point to cross over the 51% popular vote.

The multi-racial manifesto of PKR and DAP appealed to the target market mix. Bersatu and Dr Mahathir were used to nullify Umno’s strength. Amanah was up against PAS, and Warisan was up against Umno in Sabah. Great marketing strategies which were well deployed.

However, instead of consolidating its gains from GE14 and earlier by-elections, the Pakatan alliance seems to have gone one step forward and two steps back. The change of direction to outdo PAS/Umno in championing Malay rights has backfired, as Pakatan will lose its core base of non-Malay voters.

Pakatan should consolidate its gains from its previous victories before going into enemy territory. Just pure marketing sense.

Counter the Malay agenda with the Malaysian Agenda and your core voters will be back with their full support. The Umno-PAS marriage is gaining momentum, drawing Pakatan into a dog fight in their home territory.

It is never too late to withdraw from the target market that you have no chance of winning. Play to your strength, regroup and revert to previous successful strategies. Reorganise your alliance. Remove the deadwood that do not support your holistic philosophy.

If you need to hire brilliant marketing minds, I would recommend that you hire these two medical professors that I have just met. Their passion to build a better Malaysia might just provide you with the right dose of energy to retain your market share in GE15.For previous articles of On Your Own, visit thiamhock.com blog.

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