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

Question

Multiple select question.

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.

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

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

Answer 1

When forming narrow, homogenous submarkets, the following actions would be appropriate:

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

   • This step is essential for identifying relevant characteristics that define the potential submarkets and ensuring they are aligned with customer needs.

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

   • It’s important to remain flexible and inclusive when identifying submarkets to ensure you capture all relevant customer groups.

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

   • Starting with a "typical" customer can provide a clear focus and makes it easier to identify related customers who share similar characteristics.

The suggestion to aim to create no more than two submarkets, assuming that customers who do not clearly fit into these submarkets should not be targeted may not be the best practice. It can be limiting, as excluding potential customers can hinder market opportunities and does not account for the diversity of consumer needs. It’s often beneficial to explore additional submarkets if they can add value.