Segmentation

Market segmentation, dividing a market into relatively homogeneous subgroups that behave

much the same way in the marketplace, is the necessary precursor to selecting a target market or

target markets. The extensive bases on which a company is able to segment a market are

presented in Table 6.1 “Market Segmentation”. The challenge is knowing which group(s) to

select. Many small business owners have a good intuitive sense of the segments that make sense

for the business, and they choose to go with that intuition in devising their marketing strategy.

However, that intuition may not be precise or current enough to be of the most help in planning

a marketing strategy. Marketing research can be of help here, even to the smallest of businesses.

Marketing research can help the small business identify and refine the segments that offer the

greatest opportunities. Part of that process will be to identify segments that meet the

requirements of measurability,substantiality, stability, accessibility, actionability,

anddifferential response. [1] Meeting these requirements will increase the chances for successful

segmentation.

• Measurability. Is it easy to identify and estimate the size of a segment? A small business that moves

forward without a clear definition of its market segments is working blind. Intuition can only go so far.

Are there people who are interested in freshly baked cookies for dogs (it would seem so), and how many of

these people are there?