The Market Segmentation Tool

Abstract

Strategy Question: How do I better understand the make-up of my overall market?

Summary: Assuming that the market has been properly sized, it is important to also spend similar effort to define segments and size these appropriately. This tool basically mirrors the approach of the Bottom-up Market Sizing Tool. At this stage, emphasis turns to breaking the overall market into actionable segments. Two to three iterations again are common to improve accuracy. The tool output casts the segments as a rectangular graphic, made up of one column for each segment. Segment width is representative of its size relative to the other segments. The width of all segment columns, added together, ties back and equals the overall size of the markets. The result provides guidelines for determining strategic market segments and niches, and how to best position the firm within those segments.

Citation

Fairbanks, S. and Buchko, A. (2018), "The Market Segmentation Tool", Performance-Based Strategy, Emerald Publishing Limited, Leeds, pp. 35-47. https://doi.org/10.1108/978-1-78743-795-120181005