Segmentation

December 22, 2006

Every product or service appeals to a specific group of people.  The key, of course, is to properly identify that group and then be sure your strategies, product development efforts, packaging, pricing, advertising, and other elements of your marketing mix are properly aligned to that group. 

Of course, every business would like to sell its products/services to everyone.  Unfortunately, this “attitude” leads to poor strategic decisions and inefficient use of resources.  The word “niche” has been used frequently of late to describe markets.  In truth, if your Company can find and successfully develop niche markets in which you can achieve leadership share levels, you will find that you will be better off then competing in major mass markets.  This is obviously particularly true if you do not have the necessary resources to “dance with the elephants.”

Indeed, if you can find niche markets where you can provide significant innovation to meet unmet customer needs, you can also achieve better pricing and margins.

So, as you examine your business opportunities, do not automatically lean toward the biggest markets but, rather, examine where you can provide real competitive advantage which is sustainable.  You may be surprised that niche markets provide you with a greater profit opportunity then bigger markets.

Rich

Bizvice:  Strategy, Marketing & Entrepreneurship

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One Response to “Segmentation”

  1. Kit Says:

    I really think people should concentrate on building lists – really big ones! That’s where the money is at..

    Kit


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