Once you have identified different possible market segments for your business, the next step is to select the segment that is the best fit for you. There are a number of factors to consider when making this decision, including:
- Your company’s size and growth objectives: If you are a small business, you may want to focus on a small, niche market that you can dominate. On the other hand, if you are a large company with the resources to compete in a larger market, you may want to target a more mainstream segment.
- The structural attractiveness of the market: This refers to the factors that make a market attractive to businesses, such as the size of the market, the growth potential, and the level of competition.
- Your company’s objectives and resources: Make sure that targeting a particular segment is in line with your company’s objectives and will not drain your resources too much.
- The potential for economies of scope: This refers to the ability to use the same resources to serve multiple market segments. For example, a shoe manufacturer that targets both children’s and adult shoes can use the same machinery and production facilities to serve both segments.
- The acceptability of segment-by-segment invasion: This refers to the likelihood that customers in one segment will accept products or services from a company that is primarily known for serving another segment. For example, a company that is known for making luxury cars may have difficulty selling economy cars to its target market.
By considering all of these factors, you can select the market segment that is the best fit for your business.
Here are some additional tips for selecting the right market segment:
- Use a keyword research tool to find out how many people are searching for products or services in each segment.
- Conduct surveys or interviews with potential customers to get their feedback on the different segments.
- Analyze the competition in each segment to see how you can differentiate your business.
Once you have selected the right market segment, you can develop a marketing strategy that is tailored to the needs and wants of the customers in that segment.
Can you target multiple market segments?
Yes, you can target multiple market segments, but it is important to do so carefully. You need to make sure that you have the resources to effectively market to each segment, and you need to make sure that your marketing messages are tailored to the specific needs and wants of each segment.
For example, a company that sells shoes might target both children and adults. However, the company would need to develop different marketing campaigns for each segment, as the needs and wants of children and adults are different.
By targeting multiple market segments, you can reach a wider audience and grow your business. However, it is important to do so carefully and strategically.