Divide the market into workable market segments -- age, income, product type, geography, buying patterns, customer needs, or other classifications. Define your terms, and define your market. Segmentation can make a huge difference in understanding your market.
Depending on whether you are selling your offering to individual consumers or a business, there are definite differences in what you will consider when defining market segments.
The following classifications may help. Strategic — your offering is in some way important to the enterprise mission, objectives and operational oversight. For example, a service that helped evaluate capital investment opportunities would fall into this domain of influence.
Operations — your offering affects the general operating policies and procedures. Examples might be, an employee insurance plan or a corporate wide communications system.
Functional — your offering deals with a specific function within the enterprise such as data processing, accounting, human resources, plant maintenance, engineering design, manufacturing, inventory control, etc. This is the most likely domain for a product or service, but you must recognize that the other domains may also get involved if the purchase of the product or service becomes a high profile decision.
For the individual consumer: Social Esteem or Pleasure — your offering satisfies a purely emotional need in the consumer. Examples are a mink coat or a diamond ring. There are some products that are on the boundary between this category and the Functional category such as a Rolex watch a Timex would satisfy the functional requirement and probably keep time just as well.
Functional — your offering meets a functional requirement of the consumer such as a broom, breakfast cereal or lawnmower. Your segmentation will be determined by a match between the benefits offered by your offering and the need of the prospect.
Reduction in expenses Prospects might be businesses that are downsizing right sizingbusinesses that have products in the mature stage of their life cycle or individuals with credit rating problems. Improved cash flow Prospects might be businesses that have traditionally low profit margins, businesses that have traditionally high inventory costs or individuals that live in expensive urban areas.
Improved productivity Prospects might be businesses that have traditionally low profit margins, businesses that have recently experienced depressed earnings or individuals with large families. Improved manufacturing quality Prospects might be businesses with complex, multi-discipline manufacturing processes.
Improved service delivery Prospects might be service businesses in highly competitive markets, product businesses requiring considerable post-sale support or individuals in remote or rural areas.
To improve your employee working conditions it might be a good idea to take a look at something like this benefit administration software to help your business thrive and keep your employees happy and healthy. Need for education Prospects might be businesses or individuals looking for books on business planning, or seminars on Total Quality Management.
Involvement with social trends Prospects might be businesses concerned with environmental protection, employee security, etc. Factors that segment prospects Having determined the more general segmentation characteristics you can proceed to a more detailed analysis of the market.
There are literally thousands of ways to segment a market, but the following are some of the more typical segmentation categories. This is especially beneficial for vertical market offerings. Size — revenues, employees, locations In general if your offering is highly sophisticated, requires significant resources or provides greater value based on volume, then the target should be the larger enterprises.
Climate Examples of offerings might be dehumidifiers in areas near the ocean or snow plows in northern areas.
Time related factors Some services in this category are vacation related industries in summer and tax planners in the spring. Language An example of a language specific service is a Spanish TV channel.The market segmentation concept is crucial to market assessment and market strategy.
Divide the market into workable market segments -- age, income, product type, geography, buying patterns. Definition of market segmentation: The process of defining and subdividing a large homogenous market into clearly identifiable segments having similar needs, wants, or demand characteristics.
Its objective is to design a marketing mix. Market Segmentation. Every group of business plan consultants knows that a company's market segmentation is a vital part of its overall strategy, and must be clearly defined in .
Jun 29, · Segmentation is the process of dividing a target market group into sub-sections that can then be communicated with through specific communication channels and key messages. Business markets can be. Market research is time-consuming but is an important step in affording your business plan validity.
If you don't have the time or the research skills to thoroughly define your target market yourself, hiring a person or firm to do the market research for you can be a wise investment. Some other groups in Apple also focused on government as a specific market segment.
As you define the segment, you point toward an understanding of the market.