Orange segments
What is Market Segmentation?
A market segment is simply a group of customers with common needs and values. That’s the easy part! How do you decide which ones to attack?
Just answer these two critical questions:
- Why is this group of customers attractive to me and my business?
- What does any business have to do in order to be successful with such a group?
The answers to question 1 could relate to segment size, revenue or growth. There could a small numbers of active suppliers and high prices could be achievable. You’ll end up with a list of tangible and intangible reasons relating to segment attractiveness.
Question 2 asks you to define the investment (time and money) to become established and the level of service required to win and retain business in this segment.
Here you’ll look at current suppliers and compare yourselves and see if you can offer an edge to customers.
Answer these questions for all of your market segments are you’ll soon see where you should be working.