Business Diagnostics Blog

A key element to a successful marketing and sales strategy is the identification of the key market segments where you plan to deliver your product or services.

A market segment can be defined as … groups of customers and potential customers who have similar needs and desires, which are distinct from other segments and can be targeted as a group by adopting unique marketing strategies.

Here are 3 steps required to develop an effective segmentation strategy:

1) Definition

Market segments can be defined in many ways and can include:

• Geographical
• Industry
• Demographic
• Procurement based
• Operational needs

2) Measurement

The size of your market segments would normally be measured in terms of dollars and/or units and should also include their estimated growth rates over the next year.

Your percentage share of each market segment should also be estimated

3) Assessment

You will also need to carefully assess:

• Future trends for each segment and the respective customer needs and wants?
• The presence of primary, secondary, or even tertiary segments? In other words, who is the real customer?
• How or where do segment customers purchase your products or services and what is the profit potential of each segment?