RM: Market segmentation

Initial breakdown of of your market into broad segments

No products deliver to one homogenous (all the same) market. All markets can (and should) be broken down into segments based on the differing needs of each segment.

Our objective is to decide on which market segment we initially target – called the beachhead market. We will get there in 2 steps:

  1. Broad segmentation and selection of potential targets
  2. Segment investigation and selection of beachhead market

First you may need to learn a little more about segmentation

Market segmentation is a critical part of any strategy – be it for a startup or a multinational corporate. At the most fundamental level, customers within a market for a product are not all the same. The market can be broken down into groups of customers (market segments) who are similar in some way. These segments will share some similar characteristics.

Volvo station wagon

To use a very simple example, the market for sedan cars can be broken down into segments based on a number of possible characteristics such as: age, level of security consciousness, disposable income, family size, importance of brand … to name a few. If you are selling Toyota pick-up trucks, you are probably not interested in the entire market for cars, but would be interested in a market segment that contained people who needed a reliable working vehicle for transporting goods and perhaps owned a business. It obviously makes sense for you to focus your resources on marketing to this segment that have a higher propensity to buy a Toyota pickup, then spreading your marketing budget across all possible car buyers.


Below is a video by Brian McCarthy taking about segmentation in the overall context of marketing and goes on to talk a little about customer profiles that we will cover later.


Now have a look at the video below from Bill Aulet and you should have a pretty good idea about segmentation – and be ready for the segmentation assignment.

If you are still a little confused, reach out to your fellow students in the LinkedIn Group to get help – or your mentor if you prefer.


ASSIGNMENT : RM: market segmentation MARKS : 10  DURATION : 1 week, 3 days

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