Product
Segmentation Strategy
Every industry is striated with various kinds of
customers. A lot of companies only start the segmentation process by
determining the types of clients which are currently being served. By taking
the next step to classify your client base, the process actually starts to
produce tangible, usable info which might help direct a wide range of external
and internal areas which are important. These areas include company core
competencies, skill sets, product development, competitive advantages, and
market selection to name just a few. When speaking of a segmentation strategy
for your company, this strategy crosses over traditional boundaries set inside
the business.
It can take into account other important issues
like market demographics, sales channels, operational implementation, and
adaptable approaches to niche markets currently being served or targeted. A lot
of companies aren’t conscious of their very own segmentation strategy that
they’ve implemented. It’s developed over an amount of time as the company has
grown. It’s happened without forethought or a conscious effort to develop a
strategy. By planning a segmentation strategy, company owners and managers can
see more opportunities develop from non traditional core markets. The focus is
in fact widened to foster growth within current core markets as well as develop
traditional and non traditional niche markets.
A lot of companies choose to segment their
business according to market, some according to pricing structures and discount
rates, still others by client class or product lines. These are simple to
recognize and are usually the segmentation strategy that occurs by business
inertia. The concentrate on traditional core markets tend to drive most
strategic planning sessions since the comfort level is acceptable. By dealing
with the devil you know in place of the devil you do not, managers allow the
core market sales channels to dictate future thinking and company direction.
Adapting to market niches present other opportunities. Today’s product might
fit the current client base, however this will only be true until a better
mousetrap presents itself.
When managerial scope is limited only to the
core market, core client base and current sales channels, the desire to explore
smaller niche markets also becomes limited. As a corporate culture, this could
frustrate owners and top level managers for many years at a time. Core
competencies should be thought about when a segmentation strategy is being
developed. Corporate skill sets might include a tremendous capability to
acquire other companies, but have little knowledge of product development needs
within markets being currently serviced. It might be claimed that mid level
management should manage this area, but conversely they still have to be
managed to have forward progress regardless of what level they function within.
Managerial skill sets vary with the individual. When objectives are focused and
account is taken into account for both corporate and individual core competencies,
the business could make forward progress.
