How To Do a Market Segmentation Strategy For Your Startup

market-segmentation-strategy-mousetrap

It’s been said that the world will not beat a path to your doorstep, even if you have invented the best mousetrap. Real success lies in finding the right customers for your ‘better mousetrap’ and attracting them to your door, repeatedly for purchasing. This is known as market segmentation, and here's how to do a market segmentation strategy for your startup:

It’s been said that the world will not beat a path to your doorstep, even if you have invented the best mousetrap. Real success lies in finding the right customers for your ‘better mousetrap’ and attracting them to your door, repeatedly for purchasing. This is known as market segmentation, and here's how to do a market segmentation strategy for your startup:



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What is Market Segmentation?

Market segmentation is about identifying groups of customers who have a propensity to buy your product and understanding how you can best reach and communicate with them to do so.

For the entrepreneur, finding the right customers starts with adopting either a mass-market strategy or a market-segmentation strategy. There is no in-between.

For most, if not all, it’s going to be the market-segmentation strategy and this means targeting the right customers with the right product, with the right message, at the right time and in the right way.

This in turn can only be done based on a sound understanding of why and how customers buy products and services in a particular category.

Recommended reading: How To Get Your First Customer

Use Identification Bases

In the early, emerging stage entrepreneurs use ‘identification bases’ to segment their initial market – using, for example, geographical location, industry classification and demographics to profile and group potential consumer and industrial buyers.

Here are some typical ‘Identification Bases’ used in consumer and industrial market segmentation:

Geographical market locations

For example, grouping numbers of potential buyers in a city area.

Recognised industry classifications

Used for business markets.

Existing/observed customer purchase and usage behaviours of the product

For example, use of re-sellers, percentage of a product bought through large multiple chains versus local convenience shops

Basic demographics

These could be age, gender, nationality, etc.

Socio-economics

Based on things like occupation, incomes, marital status, family status.

Once you have decided on your market segmentation and the bases, the next steps are to work on your messaging and the distribution channels you are going to use for your marketing. These will depend on the market segment, the buyer process and the touchpoints you'll have with your prospects. Good luck with that mousetrap!

Recommended reading: 10 Low Cost But Effective Marketing Strategies for Startups

Over to you now. How did you go about putting together a market segmentation strategy for your business? Tell us in the comments below. 

 

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