What are the things you should do when forming narrow, homogenous submarkets?

Question

Multiple select question.

Aim to create no more than two submarkets, assuming that customers who do not clearly fit into these submarkets should not be targeted.

Begin by creating a submarket centered around a "typical" customer, then begin adding similar people to this segment.

Write down important need dimensions and customer-related characteristics to help determine which customer types should be included in submarkets.

Create new submarket(s) for people who do not fit into the initially created segment.

Answer 1

When forming narrow, homogenous submarkets, the following actions should be taken:

1. Write down important need dimensions and customer-related characteristics to help determine which customer types should be included in submarkets.

   • Understanding the specific needs and characteristics of potential customers is crucial for effectively segmenting the market.

2. Create new submarket(s) for people who do not fit into the initially created segment.

   • It’s important to recognize that not all customers will fit neatly into one segment, and creating new submarkets can help address the needs of those customers.

The first option about limiting to no more than two submarkets may be too restrictive, as some markets might warrant more detailed segmentation based on customer diversity. Additionally, the approach of forming a submarket around a "typical" customer is a good starting point, but it should be flexible enough to adapt to the diversity of the market rather than solely focused on a "typical" profile.

In summary, emphasize understanding customer dimensions and being open to creating multiple submarkets as necessary.