How are markets typically segmented ?
- Markets can be segmented based on a variety of characteristics, but of utmost importance is the difference between consumer and business markets.
- Consumer markets tend to be distributed withint eh traditional marketing categories that characterize each segment based on the following:
- Geographical Information about consumers
- Values and beliefs
- Loyalty indicators
- Any other metric that can be commonly inferred across all consumers like type of mobile phone owned or average commute time etc.
- Business markets may share similar characteristics with consumers, but more often are focused on the following:
- Geographic areas in which companies operate serve as useful delineations
- Company size would include sales, market share in an industry, number of employees, asset on the balance sheet, profitability, market capitalization, and other traditional business measures
- Industries served offers you the chance to get a sense of the trends and activities in this area
- Market segments on which these companies focus allow you to identify who their customers are, or even who their customer’s customers are in more complex B2B2B scenarios or B2B2C scenarios
- Loyalty indicators, as mentioned in the earlier consumer bulleted list, are important because you want to understand the buying patterns of these businesses.
- A hotel chain may offer a local business better rates and amenities when company commits to having all its traveling employees stay at that particular hotel chain.
An understanding that in your product competitive playing field, how are the customers segmented and served by the players in the industry – and perhaps find opportunities for you to either serve the same segments or create new segments to serve.
Source: Haines, S. (n.d.). The Product Manager’s Desk Reference.