Market Segmentation

Because it is hard (and expensive) to be all things to all people (or markets), it is wise to target specific segments of your market, particularly if you are in a smaller business. Not only will this allow your to reach more of the people who will ultimately buy your product, but targeting segments may also reduce the competition you face. Finding your niche is often the key to success for small and medium and even large businesses.

Your market may naturally be segmented by price, quality, region, customer age, income, buying behavior, industry or anything else. Typically, price and quality are the most evident, followed by product use and the benefits consumers get from using the product. Some segments will be very distinct, and some will be more subtle.

The best example of market segmenting is illustrated in the auto industry. They're all cars; but they come in all levels of luxury and utility, price and quality, etc. Some may even cross over into more than one segment, or move from one to the next.

Determine the segments of your market and describe the ones you are going to target. Keep in mind that your product might cross into several market segments. Finally, remember to address each of these segments when you are planning your marketing activities.