Question? Leave a message!




Market Segmentation

Market Segmentation 3
Dr.BlakeMorton Profile Pic
Dr.BlakeMorton,Jordan,Researcher
Published Date:17-07-2017
Website URL
Comment
15.390x Who is your customer? Market Segmentation March – May 2014 Review NotesThe Point of 15.390x 15.390x Who is your customer?THE SINGLE NECESSARY AND SUFFICIENT CONDITION FOR A BUSINESS IS... 15.390x Who is your customer?A PAYING CUSTOMER 15.390x Who is your customer?Who is my customer? “Customer” refers to the entity, such as a household, organization, or individual who pays for, acquires, and uses your product 15.390x Who is your customer? 5Customer and End User aren’t always the same Within the broad definition of a customer are: – End User: who ultimately uses your product – Economic Buyer: who makes the final decision to purchase your product 15.390x Who is your customer?Watch out for complex cases The customer and end user can be the same person or different persons depending on the situation. In multi-sided markets or business-to-business settings, your customers and end users are likely to be different people. 15.390x Who is your customer?Market Segmentation: Objective The Big Picture: Identify a multitude of markets that could be potential opportunities – markets with a problem that your product/service can solve. Break these markets into segments, do direct market research on several to decide which of these markets is best for you. 15.390x Who is your customer?Market segmentation allows you… … to capture a wide spectrum of market opportunities and understand the pain points of your consumer in order to be able to design a solution that will be of great value to them. This research will also help you select a beachhead market. 15.390x Who is your customer?Market Segmentation • Step 1A: Brainstorm • Step 1B: Narrow • Step 1C: Primary Market Research 15.390x Who is your customer?Market Segmentation: Brainstorm • Start by brainstorming a wide array of market opportunities – Include all the “crazy” long-shot ideas because they are helpful in expanding the boundaries of possibilities to where some of the most interesting opportunities might exist 15.390x Who is your customer?Then identify potential industries for your idea – List who might benefit in each industry from your idea – Focus on end users, not costumers, because you need a committed group of end users to have a sustainable business 15.390x Who is your customer?Next, identify the different tasks your end user performs – There may be similarities between certain subcategories that you can group but do not start combining categories without knowing more about your customer 15.390x Who is your customer?Important Note • When segmenting, you will find there are a lot of segments and that seemingly broad categories have a lot of important differences • Be broad and expansive when segmenting end users for your new product. You are brainstorming now, later you will narrow the list as you analyze each segment 15.390x Who is your customer?Market Segmentation: Narrow • After identifying numerous potential end users and applications for your idea or technology, the next step is to list the top 6-12 interesting market opportunities • Market opportunity = specific end users + unmet need 15.390x Who is your customer?Start by asking the following 7 questions at an industry level • Then consider what the answers would be for the end user of your product • Since you will be researching each of these markets in depth, you don’t have time to consider an unlimited number of options. 6-12 market opportunities is more than sufficient (with 6 being a much more realistic number) 15.390x Who is your customer?Narrow – QUESTION 1 1. Is the target customer well-funded? – If the customer doesn’t have money, the market is not attractive because it will not be sustainable and provide positive cash flow for the new venture to grow 15.390x Who is your customer?Narrow – QUESTION 2 2. Is the target customer readily accessible to your sales force? – You want to deal directly with customers when starting out instead of relying on third parties to market and sell your product, because your product will go through iterations of improvement very quickly, and direct customer feedback is an essential part of that process. Also, since your product is relatively new and never seen before (and potentially disruptive), third parties may not know how to be effective at creating demand for your product 15.390x Who is your customer?Narrow – QUESTION 3 3. Does the target customer have a compelling reason to buy? – Would the customer buy your product instead of another similar option? Or, is the customer content with whatever solution is already being used? Remember, on many occasions, your primary competition will be the customer doing nothing 15.390x Who is your customer?Narrow – QUESTION 4 4. Can you today, with the help of partners, deliver the whole product? – Your customer usually wants to buy a whole functional solution, not one they have to assemble themselves. You will likely have to work with other vendors to deliver a solution that incorporates your product, which means that you will need to convince other manufacturers and distributors that your product is worth integrating into their workflows 15.390x Who is your customer?