Have you identified your market segments?

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Trying to serve a whole market is like trying to put a whole orange in your mouth.

 

You can’t be everything to everyone unless you want to fail.

Market segmentation is the process of dividing a broad market, normally consisting of existing and potential customers, into sub-groups known as segments Each segment is based on shared characteristics of customers who could benefit from your products and services.

In dividing or segmenting markets, you should typically look for shared characteristics such as common problems, frustrations, wants and needs, common interests, economic status, similar lifestyles, or similar demographic or psychographic profiles.

One of your most important considerations, before you do anything, is to define your market segments and focus on them. You may think that your knowledge or services are generic and apply to a large audience. This may well be so, but that line of thinking will not serve you well if you want to create a successful business.

The overall aim of segmentation is to identify high yield segments. Those segments that are likely to be the most profitable, easy to access or that have growth potential, so that each segment can be selected for special attention and become important parts of your target market.

The problem is that the market has become so competitive these days because of globalisation and the exponential growth in technology such as the cloud, social media, robotics, and analytics. So unless you are in a very specialised niche, you are likely to face stiff competition from competitors who are already well-known to your market.

Even though your products and services may well be useful for a large audience, the trick to building visibility, particularly on the Internet is to limit your focus to market segments where you can stand out from the crowd. In other words, it is better to be a big fish in a smaller pond.

By focusing on the particular market segments, of which there could be several, you will have to accept that you will not be targeting a more general audience that could benefit from your products and services. The key is to focus, focus, focus. Pick a niche as specific as possible, but not narrower than there is a market big enough to monetize.

Try to find the intersection of your passions and skills, and profitable segments specific enough to differentiate from the larger and more generic markets with tougher competition.

 

“To be useful, segments must be measurable, substantial, accessible, differentiable, and accountable”. Philip Kotler

 

An additional advantage of focusing on a specific niche is that you can target the type of customers that are a better match for you, people you really like dealing with. By focusing on them they will begin to like you, and finally to trust you. Creating this trust is easier if you focus on a market segment in which your offering fits the customers perfectly.

Focus on potential customers in each segment who already want or need your product. That way, it becomes easier to achieve your sales revenue. Try to make the potential customers understand that the hard decision is not to make the purchase, but that without the purchase, their life will be more difficult. This is much easier if you focus on your chosen market segments.

 

 

[read more=”Personal Experience” less=”Personal Experience”]

Personal Experience:

Sometimes you will approach the wrong customers for your type of business. All you can do is turn it around and find your way again with good segmentation practices.

When I see a successful business, more often than not they have become that way because they continue to grow profitably, a result of really understanding their market segments and their customers. They use segmentation to better target their products and services. They are not continually looking over the fence to see if the ‘grass is greener’ because they know where it is greener for them.

In my experience, small enterprises such as men’s sheds have the most difficulty with segmentation. Who will they provide services, to old men, young men, disabled men or to all men? And just to complicate matters what about women of all ages? The problem is that one men’s shed, particularly a small men’s shed will have great difficulty in funding and be providing activities to a wide range of gender, ages and activities to suit all and maintain their interest.

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