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Product People Product Management Governance Design and Distribution Obligations

How to set a target market determination for product growth

The Design and Distribution Obligations (DDO) legislation was passed on April 2019 in Australia to improve consumer protection in relation to financial and credit products that are issued and distributed to retail customers. If you are designing and/or issuing financial products, you are now required to have an appropriate product governance framework to ensure that you are targeting the right people. 

What is a target market determination?

A significant design obligation from the DDO requires product issuers to make a target market determination in relation to each of their products. The product designer essentially needs to make a judgment about product suitability for the intended retail customers.

What are your customer needs? What are their challenges and pain points? Answering these questions early on can help you ensure  that you are providing fair value to your customer.   Early on, decide on a product review process, determine how you will handle customer feedback and change and evolve your product strategy.

Key points

  • How to set a target market determination?
  • What are 5 elements of a clever target market determination
  • Use our checklist to get started
  • What tools can I use to power-up my target market monitoring and product reviews? 

How to set a target market determination

As explained by ASIC, industry must design fit-for-purpose products that meet consumer needs. They will also need to take steps to ensure their products are reaching the right consumers.  

Quality framing of your segmentation and target market not only improves your product marketing to differentiate your product but it now also serves to meet your overall regulatory obligations in your design and distribution.

When you set your target market, it is also vital to continue assessing and refining your product and target market determination to stay in sync with changing market trends, competitive landscape and customer needs, on a continuous basis. Is the product delivering what you promised in your unique value proposition, are the outcomes measurable and have you conducted customer UX/UI interviews to generate distinctive insights?  This step helps uncover new ways to engage your customer and deliver value - innovate your features, service model and commercial model.  

Product managers are very familiar with the importance of assessing their target market and understanding what problem or customer pain point you are solving for. In ASICs DDO you are required to set a target market for your product strategy – ideally at the planning stage and put it in writing. The financial product must be consistent with the likely objectives, financial situation and needs of the people in the target market.

 A Target Market Determination describes who a product is appropriate for (target market) and any conditions around how the product can be distributed to customers (such as a condition that a customer must have received personal advice about a product before they acquire it.

It also describes the events or circumstances where we may need to review the Target Market Determination for a financial product. These are your triggers.

Skyjed has created a check-list to help you get started on your target market determination so you can institute a review process that doesn't slow you down: 

Put these things in target market determination

What this means

Describe class of consumer for the product

For your market what are the sub-segments. Define your customer personas - pain-points, preferences and critical unmet needs.  What is the knowledge and experience of your target persona in relation to your product? What are your customer objectives and needs when buying your product?  What is their financial situation and risk profile eg define risk areas customer must be made aware of to make an informed choice about your product.  What is their ability to bear losses? 

What is your competitive landscape, market trends and market drivers.

What are the conditions or restrictions

For customer personas, the buyer journey from awareness of your product, consideration and the factors around the buying decision.  What legal and regulatory obligations relate to each of these 3 phases? 

Set review triggers. 

A trigger is best used as an early warning signal. In Skyjed, it is set as a Key Performance Indicator (KPI) to monitor trends and triggers.  Triggers can be an event  and /or circumstances that would signal that the target market determination requires review and changes.  

This is an opportunity to adjust your product strategy and tackle new challenges.

Review cadence – first review start date

Set a product governance calendar with your product review dates. In Skyjed this sits in our Product 360 and is called conducting your Audit.  Skyjed has a ready to use product governance calendar where you can create events and get reminders.

Review cadence – ongoing review schedule

Set a review cadence in your product event calendar. Every 90 days, monthly or weekly for some items.

Reporting – when and who and what

We recommend you have two types of product reports to engage your stakeholders, collect feedback, prioritise needs and explain your product goals.  The reports are Product Insights and Governance Reports.  The insights are real-time to enable you to monitor and refine your target market .The reports are for sharing across your stakeholders and for regulatory reporting.

Reviews between the product designer (issuer) and channel (distribution)

Your product is likely to be marketed and sold through different ‘distribution or channels’.  All the distribution points need to be reviewed in your product monitoring.

Describe your product features and benefits

The features are key attributes of you product.  Benefits list what value that brings to customer.  Map your product features and benefits to your target market and continue to review to ensure they are fit-for-purpose in your product monitoring.

Define your UVP

A unique value proposition will also help you understand if your product is fit for purpose.  Dont forget to stay in sync with changing market, regulatory and customer needs, on a continuous basis.

Product Risks

Tracking risks in your product strategy including target market determination makes a lot of sense.  Power-up the risk assessment by also setting action plans to mitigate the risks. Set the action plans, monitor them and tick-off as you complete.


The benefits of setting and reviewing your target market

  • align your product lifecycle strategy to deliver a seamless end to end experience
  • helps you understand your customers and their changing needs
  • ensures that customer needs are always met and uncover new ways to engage with your customer.

How Skyjed helps with setting and monitoring a target market

Skyjed helps you close the the product governance gap with a digital product lifecycle, risk and governance tool.

How Skyjed helps:

  1. Setting and monitoring a of target market:
    Skyjed Product 360  enables you to identify and review the target market for each of your products, on a continuous basis.
  2. Identification of review triggers:
    The Skyjed product governance helps you to collaboratively identify and share triggers which could indicate if your product is not the best fit for a consumer.
  3. Record keeping:
    Skyjed’s sophisticated reporting system allows you to save time with auto-generated regular reports on the state of your product strategy, health and governance.  
  4. Trigger monitoring:
    Skyjed’s product monitoring and reviews include a feature where you can set triggers and get notifications when a trigger event occurs.  This saves time and means right people can be informed to take action.

The Skyjed product lifecycle management and governance platform provides organisations with a 360-degree view of their product portfolios health and risk status while facilitating collaboration, transparency and product trust in the day to day operations of the organisation.  Save time on reporting so you can get back to what you love - product strategy and innovation for growth.

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