Buyer Selection Framework
Selecting target buyers
The Buyer Selection Framework is a strategic tool used to identify and select the most favorable buyers for a business. It involves analyzing the characteristics of potential buyers, such as their purchasing needs, growth potential, and bargaining power, to determine which ones are the most attractive. The framework helps businesses to improve their competitive position by targeting the right buyers and creating a competitive advantage.
- Buyers differ in their purchasing needs and growth potential
- The firm should target buyers whose needs it is best suited to serve
- The costs of servicing individual buyers can vary significantly
- Identify Buyer CharacteristicsAnalyze the characteristics of potential buyers, such as their purchasing needs, growth potential, and bargaining powerPro tipUse competitor analysis to identify the strengths and weaknesses of each buyerWarningBe careful not to overlook the costs of servicing individual buyers
- Evaluate Buyer AttractivenessEvaluate the attractiveness of each buyer based on their characteristics and the firm's capabilitiesPro tipUse a weighted scoring system to evaluate the attractiveness of each buyerWarningBe careful not to prioritize one characteristic over others
- Select Target BuyersSelect the most attractive buyers as the target marketPro tipUse market research to validate the target market selectionWarningBe careful not to overlook the potential for buyer concentration
- Create a Competitive AdvantageCreate a competitive advantage by targeting the right buyers and differentiating the firm's products or servicesPro tipUse innovation and marketing strategies to create a competitive advantageWarningBe careful not to compromise on quality or service
Bic's move into the pen market is an example of a company using the Buyer Selection Framework to identify and target a new market
Gillette's diversification strategy is an example of a company using the Buyer Selection Framework to identify and target new markets
The Buyer Selection Framework was developed by Michael E. Porter as part of his work on competitive strategy. It is based on the idea that businesses can improve their competitive position by selecting the right target buyers and creating a competitive advantage.