As a small business or start-up it can feel quite scary to segment and target only a portion of the market. After all, we need to generate as much business as we can right? Right. But let me tell you, it is more effective to dominate a larger share of a small market than a smaller share of a large market. It's natural to worry about missing opportunities if you dismiss a portion of the market. But you can’t be all things to all people. If you try to be, you could weaken your messaging and branding, and end up merely a ‘me too’ company.
Beside the efficiency of it all, there are many other benefits to be had from segmenting the market. Take a look at these:
Benefits of Segmentation and Targeting for Small Businesses
- Efficiency: it will be easier to craft communications and the marketing mix focusing purely on the needs of those customers in your target segment.
- Attraction: all your marketing techniques will be positioned to attract the right customer.
- Risk: strategic decisions on how to go to market will arise from detailed knowledge of the potential consumer.
- Strategy: your marketing activity will be commercially viable. You will formulate better marketing objectives and strategies.
- Differentiation: you will find it easier to differentiate your product from those of your competitors and design your unique selling proposition (USP).
- Focus: you will be able to tailor your offerings to the groups most likely to purchase them.
- Growth: you will see growth in both market share and business results.
- Profitability: superior profitability may result from successful market segmentation.
- Young Adventurers age 20 - 35
- Families age 30 - 55
- Seniors aged 55 -75
There are some highly complex models you can use to map attractiveness and ability to compete (and I will be blogging about them soon) but for now, I would say make it simple and follow your hunches.
If you need any help with segmenting or targeting, please contact me. Happy to help.