In my last blogpost about competitor analysis I introduced the idea of segmenting the market should you choose to pursue a focus strategy whereby you will aim to satisfy for a particular type of customer, not any buyer. In such a scenario you are not serving the whole market, or “mass” market but a distinct sub-group within it. If you have chosen to take a focussed approach, you must have already developed an understanding of how your business fits into its competitive set and where the market lies and what it wants. It is time is to consider how the market sub-divides into small groups, or segments. Like the many parts which together form a citrus fruit, a market for a product is formed from many small units. You may be familiar with the concept of market segmentation and some of its phrases like “niche marketing”, but this topic is so critical to any effective marketing strategy that it deserves some dedicated attention. If you get this step right, many other steps will follow smoothly, but an error at this early stage might leave a fundamental flaw in your plan which would lead to a lack of success for your business.
What is segmentation? A definition: ”The sub-dividing of a market into homogenous subsets of customers”
To fit each segment can reveal some curious, unexpected coincidences. For example, when washing powder purchases were examined by size of box, it revealed a cluster which contained both students and pensioners, because both groups tend to live in accommodation with restricted storage space, so they choose the small format boxes. Be careful not to make assumptions about your segments. Customers will segment themselves according to their behaviour and the better you understand your customers, the more you will know about your potential target segments and their motivations to buy your product. If you would like to discuss your market segmentation please email [email protected] and look out for marketing clinic events in 2018.
You will need to ask yourself, can I adapt my product to suit the needs of this segment?
Does it need to be delivered differently for this group, or priced differently?
What is the best way to reach this segment? You should discover that each segment which you choose to pursue will require its own individualised communications plan, which you must implement while maintaining some consistency with your overall brand positioning and messaging in the way that the whole orange is held together by its single outer skin.