The components of a Target Market segmentation - Workbook

1. Market Segmentation
Target Market - Workbook
Dr. Celen P.Paul

2. 2
Selling System of 21st century
The markets of the 21st century are
not the same anymore as before.
Tremendous change has occurred in
the buyers / client behaviour. More
than 60% of buyers call you in when
they are already in their solution
choice phase. It is therefore of the
utmost importance that “ start-ups “
segment their markets very well and
frequently review the Go-To-Market
strategy, and eventually switch to a
Go-To-Customer strategy. The profile
has therefore changed dramatically
GTM to GTC

3. 3
• The components of a
•Target Market
segmentation

4. 4
Seven Steps to Successful Segmentation
for Startups
• Step 1: Determine where you really are within the startup life
cycle. Relative position in chasm / demand type
• Step 2: Create as broad idea of an addressable market and then
break it down in to all possible sub-segments. Use CSF’s and
MPRS
• Step 3: Create customers profiles for all remaining sub-
segments. Use problem/Need search process
• Step 4: Assess profiles again critical flaws criteria and eliminate
those that fail
• Step 5: Assess remaining profiles against selection variables
continuously until top segment remains. Define Beachhead…
• Step 6: Test target segment against SWOT and performance
goals
• Step 7: If no segment apparent, repeat process

5. 5
Primary Market
Research
Segment Business
Markets
Target Markets Problem Testing
Rate final
segment
Assess &
Validate
Group Similar
Need markets
Rank &
Prioritize
Start Defining Value
Proposition
Process Target Market search

6. “
”
6
The components of Target Market segmentation
1. Primary Market Search
Life Cycle Positioning
If you have done the positionig in the Value Proposition Module then skip this step and go
immediately to Step 2

7. 7
PRIMARY MARKET RESEARCH

8. 8
Tech Adopt
Life Cycle
Early markets Mainstream market Conservatives
Technology Enthousiasts Visionaries Pragmatists Conservatives Skeptics
Innovators Early Adopters Early Majority Late Majority Laggards
Percentage 2,5 - 3 10 - 13,5 - 15 34 34 15
Characteristics
They want the truth without
any tricks
This group of pragmatism care about : Their real goal in buying new-
tech products is simply not to
get delayed. Conservatives do
not have high aspiration about
their high-tech investments and
so, will not support high price
margin. They like to buy
preassembled package at a
heavy discounted price. The
price can be low because the
R&D has long since been
amortized.
They want access to the most
technically knowledgeable
person to answer their
question.
* the quality of the product they are buying
* the infrastructure of the supporting products
Technology is a central interest
in their life
They are people who relate the
potential benefits of new
technologies
and system interfaces
* the reliability of the service they are going to get.
They make a technology
purchase simply for the
pleasure of exploring the new
device properties
Buy new product concept very
early, but unlike innovators,
they are not technologists
The word risk means chance to waste money and time
Share some of the early
adopters ability to relate to
technology but they are driven
by a strong sense of
practicality
Wait until something has
become an established
standard
Don’t want anything to do with
new technology
They are not many but winning
them over at the outset of a
marketing campaign is a
necessary condition
They’re not comfortable
with their ability to
handle a technology
products
They use road map since their
born and they don’t want to buy
a GPS
To be the first to get the new
stuff
Why ??? Curiosity Personal win Calm Risk-averse Stubborn
Personalities
Glory & Glamour Company Loayl
Risk Takers / Ambitious
Product
Satisfied with Minimum Viable
Product
Need " Whole Product
Requirements
Minimum set of features
required to get feedback from
market
Need Productivity Improvement
Expectancy Need Productivity Improvement
A whole product is combination of all things that give
buyer a compelling reason to buy
This includes yr core product <plus any services and
other products that augment it
GAP's
Between innovators and early
adopters
A huge GAP between early adopters and early majority
Why ? :
the technology product cannot
be translated into a major
benefit
Mainstream / Early majority wants a productivity
improvement
Between early majority and late majority
late majority is less competent with technology than
the early majority

9. 9
MVP versus „Whole product“
Minimum Viable Product ( MVP )
A Minimum Viable Product is the smallest feature set that lets you start learning about customers.
Don't confuse your MVP with a minimal product. Your MVP needs to address your top customer problems and deliver on your Unique Value
Proposition.
Objective Details Step-by-Step Process
Define the minimum
feature set needed
to solve your top 1-3
problems.
For each of the problems outlined earlier, sketch out
the top features or capabilities that will address those
problems.
• Outline a possible solution for each problem
• Don't spend too much time detailing
• These features will form the basis for your Minimum Viable
Product

10. 10
Positioning : questions to ask
Status Question Answer
Start /hypothesis • What is my idea ?
• What is my proposal ?
Target Market • Who is your target customer?
• Who is my potential buyer ?
• What kind of problem do you solve for them?
• Is this an important problem for this customer?
• Is it an urgent problem?
• Where is “ Low Hanging Fruit” ?
• How do you plan to solve this problem ?
• What type of benefits will it generate
• A
• B
• C
• D
• E
• F
• G
• H
Ideal Customer Profile • Describe Demographics
• Describe Psychographics
Positioning PLC
All of these PLC-phases, with the
exception of the introduction phase are
existing markets. For each type of market
a different value proposition and business
model has to be defined
Are you in a market :
• Starting phase
• Growth phase
• Maturity phase
• Declining phase
Find out the „ Demand type New Concept, New Paradign or existing Market
Find out what phase of the
technology transfer (Chasm-
principle) yr market segment is
• Profile early Adapter looking for
• Describe profile pragmatic
Summarize a viable MVP
what do prospects say about yr solution ?
Whole Solution
what is whole solution ?
How can you achieve it

11. 11
Create +Test the MVP
Question Answer
Describe the key aspects of your MVP for which you are currently seeking market feedback.
Answer the following questions after testing the MVP.
Is our understanding of the customer problem accurate
and relevant?
Does the MVP solve the customer’s problem?
Does the product solve the problem better than a viable
alternative currently on the market?
Would they use the product? Can they imagine the
product as part of their everyday life?
What is their primary concern about buying and
implementing the product?
How much would they be willing to pay for the product?
What process / process-changes would the customer
employ when deciding to buy such a product?
Who is involved in the decision-making process?
Whose budget will the funding come from?
Who will be the users of the product?

12. “
”
12
The components of Target Market segmentation
2. Segmenting
Business Markets
Compose the broadest idea for your
Product / Market mix ( Ansoff)

13. 13
Segmenting Business Markets
How can I segment MY hypothetical market
Question Answer
Demographic segmentation
Industry : which industries should we focus on
Company size : what size of companies do we focus on (3-Tier )
Location : what geographical areas should we focus on ?
Operating variables
Technology : what customer technologies should we focus on ?
Usage/non-user status : focus on heavy, medium or light users OR non-
users ?
Customer capabilities : focus on MVP-potentials or “whole product”
Purchasing approaches
Organizational : highly centralized or decentralized
Policies : leasing, SaaS-lovers, service-contracts, RFP,…
Situational factors : Urgency, specific application, size of order
Personal characteristics Buyer-seller similarity, attitudes toward risk, loyalty

14. 14
MPRS –approach - exercise
This methodology Matrix priority Rating system is very usefull for start-ups
with Horizontal Products
• Please look at next slide when you have an horizontal solution and you
start from scratch with only 1 or 2 Hypothesen.
• For each of your hypotheses list minimum 2 -3 criteria about " why
customers would buy yr solution ". Sometimes they are also called “
CSF “ ( Critical Success factors )
• Here are listed industrial segments with subsegments in the example.
• Only with gut-feeling, try to score them from 1 to 5. A 5 for a good fit with
the CSF, a 1 for a poor fit
• Make totals
• Then set a treshold for the total sum and select a couple of business
segments ( with highest values )
• look in a directory for companies in those segments to contact for testing
the validity of your hypotheses
• Then check your essentials and effectivity requirements

15. 15
MPRS- approach to close in and focus
what are the 3 key criteria why a prospect should buy from you ?
Primary Sectors ( NACE ) Subsectors
Criteria
TOTAL
x y z ??
A - Agriculture, forestry and fishing Crops Animals Forestry Fishing 0
B - Mining and quarrying Coal Petroleum Gas Metal ores 0
C - Manufacturing
Food, beverages,
tabak
Textiles, Leather Paper. Printing
Chemicals,
rubber 0
D - Utilities Electricity Gas Steam Air conditioning 0
E - Water supply; sewerage; waste Collection Treatmnet Waste, sewage
0
F - Construction Building Roads Railways Tunnels 0
G - Wholesale and retail trade Nutrition Household goods IT-equipment Other 0
H - Transporting and storage
Passenger,
Freight
Land, water, Air Warehousing Postal, courriers
0
I - Accommodation and food service Hotels, Resorts Campings Restaurants Catering 0
J - Information and communication Publishing Media Telecom ITC 0
K - Financial and insurance activities
Banks, Monetary
Inst
Lease, Credit
Insurance, Risk
coverage
Pension funds
0
L - Real estate activities Buy and Sell Agencies Renting
0
M - Professional, scientific and techno
Legal,
Accounting, Vets
Consulting,
Advertise
Architects,
Engeneering
Testing,
R&D,Mktng 0
N - Administrative and support service Renting, lease HRM, Call centre
Tourisme, travel
agent
Security,
cleaning 0
O - Governement Defence Social Security Police, Justice Firebrigades 0
P - Education Primary Secundary
Higehr /
University
Other
0
Q - Human health and social work
Hospitals, GP
practice
Residential care Nurses Social Work
0
R - Arts, entertainment and recreation Artistic, creative
Entertainment,Sp
ort
Library, museum Gamble, betting,
0
S - Other services activities
Trade Unions,
Prof. Org.
Repair, Washing
Fitness centre,
well-be
Hairdressing,
Funeral 0
T - Activities of households
Domestic
personnel
Undifferentiate
goods 0
U - Extraterritorial organisations bodies
0

16. 16
Essentials of market research
Essentials Y / N / OK
What is the size of the market? How large is the target market?
Geographic spread ?
What is your demand Type ?
What problems concern the target market? Are any of these problems greater than
the one you’re addressing?
How does your product or service fix the problem?
•Who will buy your product or service?
Why do they need it? What unique need does your TYPE of product/ services
meet?
Why would they buy from you? What is the gap un-serviced by current players?
Who are your competitors? Who are the other key players? How is your product
different from competition? What are their strengths and weaknesses?
Can you make the reference price in the market ? How efficient is your solution ?
Is this segment a price sensitive ? Dou you have a premium?
How much are customers willing to pay for this product/ service (top/
bottom/average)?
What is the REAL available market for you? What share of this can you reasonably
expect to get?

17. 17
Requirements for Effective Segmentation
Measurable Size ,
profiles of segments can be
measured
Substantial Segments must be large or
profitable enough to serve
Accessible Segments can be effectively
reached and served
Differential Segments must respond differently
to different marketing mix elements
Actionable Must be able to attract and serve
the segment

18. 18
Key Information about your segment
Key Questions Answers
What are the key political, regulatory, economic,
environmental, social, cultural and technological
trends that affect the space you are in?
What are the key issues facing customers in this
space?
Who are the key stakeholders?
Who are the analyst firms, analysts, journalists,
bloggers and conference presenters that talk
about relevant issues and technology?
What are the main conferences and events?
What are the main media outlets that keep people
informed about the industry and its technology?
Prepare your list of questions and issues to
address in your customer meeting / talk / interview

19. “
”
19
The components of Target Market segmentation
3. Customer Profiles
Use „ Problem-Need cycle

20. 20
Understand Customer Problem and Need
• What problem causes the pain or frustration? Sketch a scenario in which the
customer attempts a task and feels pain as a result.
• How does the customer try to cope with the problem now?
• What is causing the problem? What is interfering with a speedy solution? What
goes wrong and why?
• How much money is the customer losing, either in additional costs or lost
revenue? Quantify the pain.
• Who is the individual who feels the pain first and how does it “waterfall” up or
down?
• Who else feels the pain? The customer’s customers? Suppliers? Partners?
Investors?
Think
Plan
ExecuteAnalyse
Adapt
Phase 1
Test customers /
prospect‘s perception
• of the problem and
• his urgency / need to
solve it

21. 21
„Problem-Need cycle“ ( explanation next slide )
Hypothesis
Assumptions
Product
Ideal
Customer
Market Type
Demand
Creation
Test Need /
Problem
Relations
Ideal cust.
Interviews
Evaluate
Results
Summarize /
Adapt
Adapt & Test
Product
Reality Check
Product
presentation
Customer
visits
Validate
Verify Product /
Market fit
Problem /
product
Iterate
KOL
Create
Business M

22. 22
Explanation „ Problem-Need“ cycle
• A linear process now. Needs a few iterations
• Remember : Steve Jobs made 7 iterations before he launched the i-Pad
• For now one should understand the general principles of the „ problem-Need cycle „ and how the iterative
process works.
1. make the assumption about which urgent problem or need this idea / hypothesis will solve
2. make an assumption about the ideal customers and his compelling reasons to buy. Which decision
criteria are the basis for decision. What is the urgent problem or need that needs to be addressed
3. Do MPRS-exercise = evaluation and ranking of the economic (sub)sectors with reference to their
affinity for the 3 parameters above : hypothesis / problem / decision criteria. The highest scores are
further taken into further evaluation. That can be wrong, but due to scarce resource one has to limit
the number of test-markets
4. Use Problem/Need search process,
5. Create customers profiles for all choosen sub-segments. Try to group learned experiences into an
MVP-matrix.
6. Assess profiles again critical flaws criteria and eliminate those that fail.
7. Finally choose a few, the top 5 or top 10, assess them against neutral, pragmatic selection variables
until top segment remains. Define a Beachhead if possible.
8. Test target segment against SWOT and performance goals
9. If no segment is apparent, or the assessment indicates a weak correlation, then repeat the whole
process
• Fill in next slide to start with

23. 23
Test Need / Problem paradigm
Identify your customer's must-
have problem(s) and how they
address them today.
Step-by-Step Process
Based on your customer
segment outline/list their top 1-
3 problems
Fill in Slide
Objective Details Questions to ask
Describe the top 1-3 problems
the customer needs solved.
Look at the problem from the
customer’s point of view first,
independent of any solution
ideas.
Describe :
1. Aa
2. Aa
3. Aa
Existing alternatives are how
your customers address these
problems today. Many times
these existing alternatives are
not necessarely an obvious
competitor.
• What problem causes the pain or
frustration? Sketch a scenario in
which the customer attempts a
task and feels pain as a result.
• How does the customer try to cope
with the problem now?
• What is causing the problem? What
is interfering with a speedy
solution? What goes wrong and
why?
• How much money is the customer
losing, either in additional costs
or lost revenue? Quantify the
pain.
• Who is the individual who feels the
pain first and how does it
“waterfall” up or down?
• Who else feels the pain? The
customer’s customers?
Suppliers? Partners? Investors?
• The objective of their work: What are
they trying to achieve?
• How they perform their work
• The problem they face
• How the problem impacts their
objective

24. 24
Ideal Customer exercise
Customer
Profiles
Approach
Who is the ideal customer in the
chosen Market segment ?
Answer Facts Assumptions
Innovators curiosity Where to find them ( 3% of market ) Check on trade shows, congresses, blogs, etc… x
Early
Adapters
His
Problem
What problem causes the pain or
frustration? Sketch a scenario in which
the customer attempts a task and feels
pain as a result.
How does the customer try to cope
with the problem now?
What is causing the problem? What is
interfering with a speedy solution?
What goes wrong and why?
How much money is the customer
losing, either in additional costs or lost
revenue? Quantify the pain.
Who is the individual who feels the
pain first and how does it “waterfall” up
or down?
Who else feels the pain? The
customer’s customers? Suppliers?
Partners? Investors?
His
Personality
The objective of their work: What are
they trying to achieve?
Buy new stuff first to get personal advantage
How they perform their work Beat competition
How the problem impacts their personal
objective
Assumptions need to be validated later on

25. 25
Ideal Customer exercise ( 2)
CATEGORY
GOOD FIT / QUALIFY IN POOR
FIT /
QUALIFY OUT
PRODUCT/SERVICE OFFERING
TARGET MARKET
DEMOGRAPHICS:
SIZE - (£/$ revenue,
#employees, etc.)
SECTOR - (Industries,
functions, etc.)
LOCATION - (Geography, etc.)
KEY STRUCTURAL
FACTORS
Internal issues - how they are
organised, what systems they
have in place, etc.
How they make decisions,
where the power lies, etc.)
(External issues - including
their position within their
industry, etc.)
Current issues, trends and
trigger events that are likely to
initiate a buying process)
OTHER FACTORS
Other key qualifying factors
notcaptured elsewhere,
beyond theusual Finance,
Authority,
Interest, Need and Timescale)
NOTES
Capture anything else that
could be useful

26. 26
Find an Early Adapter
Objective
• Define an early adopter - not a mainstream customer.
• Test customers / prospect‘s
o Perception of the problem
o his urgency / need to solve it
Details
• The elements of your business model can and will vary greatly by customer segment.
• It’s important to distinguish between customers and users.
o Customer is someone that pays for your product.
o User is someone that interacts with the product or service of the customer.
• Early Adopter is a customer that you have defined with specific attributes and will initially target
Step-by-Step Process:
• Start by brainstorming the list of possible customers you envision using your product.
• Distinguish between customers and users.
• Split broad customer segments into smaller ones as you can’t effectively build, design, and position
a product for everyone. While you might be aiming to build a mainstream product, you need to start
with a specific customer in mind.
• This your early adopter.
• Example : Even Facebook started with a specific user in mind - college students.

27. 27
„Problem-Need cycle“ : fill in
Hypothesis
Assumptions
Solution :
……
Ideal Customer :
• Aaa
• Aaa
• aaaa
Market Type :
• Aaa
• Aaa
• aaa
Demand Type
Test Need /
Problem
Relations
Ideal cust.
Interviews
Evaluate Results
Summary/Adapt
Adapt & Test
Product
Reality Check
Product
presentation
Customer visits
Validate
Verify Product /
Market fit
Problem
…….
Iterate :
• 1
• 2
• 3…
KOL
Create Business
Model :

28. “
”
28
The components of Target Market segmentation
4. Validate and Assess
Customer Profiles
with Test & Interviews

29. 29
Prepare to talk to customers
• Make list of 20 – 30 customers proportionally spread over 3 Tier and the
business segments under consideration
• Prepare your list of questions and issues to address in your customer
meeting / talk / interview
• Make Script with possible objections or questions ? Prepare also the
answers, eventually train yourself with role-model.
• Describe your product vision : this should be your Value Proposition
• Write a statement that describes your product vision, which identifies one or more of the
following:
• Your target customers and their problem
• The product solution you are making
• How the user goes about their job and will use the product solution
• Customer outcomes and benefits
• Three- and five-year scenarios for your product and company
• Culture needed : NO selling mode !!!
• Search then execute
• Learning and discovery
• Agile development
• No „ fear of failure culture“
• No sales, marketing, bus.development departments

30. Script preparation

31. 31
Hypothesis 1 : Description.
Details of your hypothesis Help
Name
xyz
Content
Describe here the products,
services that you offer your
customers in the context of this
hypothesis
Customer NEED or
PROIBLEM !
• Need/Problem 1
• Need/Problem 2
List of needs, problems of your
prospects that your hypothesis
provides solutions for.
Ideal Target Market
Describe your ideal customer /
target market (company size,
sector, geographic area, etc.)
Proven customer
interest in your
hypothesis
• % of customers contacted who show an interest
• % of interested customers who actually bought
Describe here your sales
experience for your hypothesis:
Average Turnover /
customer (order of
magnitude)
Different options are available: a
single value regardless of the size
of the company, several values for
different sizes, a value "per
employee or user", etc..
Total number of
actual customers

32. 32
Hypothesis 1 : Sales pitch / argumentation
Needs/Problem customer Summary of your sales pitch / argumentation
Situations with
encountered problem
Summary of your sales pitch / argumentation

33. 33
Hypothesis 1 : Objections &
Counterarguments
Customer objections Summary of argumentation and counterarguments
IT afdeling
Website manager
In your list, order the objections by frequency of occurrence: first the more frequently encountered than the rarer

34. 34
Customer Interview program
• Scenario :
• Use script /questionnaires and surveys
• Use the Internet
• Use Telemarketing / Congresses / Trade Shows
• Who ?
Talk to potential customers
Talk to suppliers / resellers / potential future partners
Talk to competitors
Talk to complimentary services/products
Talk to bankers, lawyers and accountants
• Customer Archetype / Buyer Profile / Persona
Forrester
Siriusdecisions

35. 35
Welcome
•Set stage
•1-2 minutes
Collect
•Collect demografics
•Check/test customer segment
Story tell
•Set problem context
•Few minutes
Problem Rank
•Test Problem
•5 minutes
Explore
•Explore customers world view
•Test Problem – 15 minutes
Wrap Up
•The hook and ask
•2 minutes
Results
•Document results
•5 minutes
Example : Problem Interview in 30 minutes
• Briefly set the stage about how the
talk will work
• Ask introductory questions to test
Customer Segment
• Identify early adapters
• Illustrate top problems
• State top 1-3 problems and check /r
ank with customer
• Test each problem. Ask how they
address today. Listen
• Ask follow-up questions
• Permission to follow-up
• Referrals
• Document Results

36. 36
Asses & Validate :
Scotsman qualification + segment identity
Questionnaire Qualification Yes No
S Solution
Do we have the right solution ?
Does the customer has a lot oft objections?
C Competition
Who is the competition ?
Can we beat him ?
O Originality
USP and does the Prospect agree with it ?
T Timing
Is the time plan agreed and realisitc
S Size
Is the estimated Budget big enough to afford the resources
and do we have the necessary ressources?
M Money
does the customer has a budget ?
I is the project worthfull / profitable for him ?
A Authority
Is our contact person the decision maker ?
Do we know the decision maker? Does our competition
knows ?
N Need
What is the final goal of the customer ? Which problem to solve ?
Do we know his business problems? Do we understand ?
TOTAL TOTAL Number Points in Yes / No column

37. 37
Assess Problem
No Question Fact Assumption
1. Who is your target customer? What kind of problem
do you solve for them?
2. Is this an important problem for this customer? Is it
an urgent problem?
3. How do you plan to solve this problem for the
customer? Describe how your solution will work in
the customer’s hands and the benefits that it will
generate.
4. Who is your competition? How do they solve this
problem for their customers today?
5. What is unique about your way of solving the
problem? Why are you better than anyone else in
solving this problem?
Label each answer as Fact (and list the accompanying evidence) or
Assumption (if you don’t have any evidence at this stage).

38. 38
Test – Validate the assumptions
Assumption Information Where/Who Method
1.
2.
3.
List the assumptions and then make an action plan :
• What key piece of information would validate the assumption? (Information)
• Where does that information reside? Who has that information? (Where/Who)
• What is the best way to gather that information? (Method)

39. 39
Evaluate market feedback
• Is the market problem urgent? Will customers care if the
problem is not solved? Do they have another way to
solve this problem?
• Is the market problem pervasive? Determine if the
identified market problem applies to a significant
percentage of your desired target market.
• Will your buyers pay to have this problem solved?
• On the basis of the answers to the above questions,
which direction should you take?
• Make a list of the interviewed companies : OK or failed

40. “
”
40
The components of Target Market segmentation
5. Validate and Assess
remaining Customer Profiles

41. 41
Create Groups According to Similarities
Unless you have unlimited time and money, rationalize
all the profiles into segment groups
• Out of 50 or so profiles, about 2-3 segments will likely
coalesce
• Look for key similarities
• Vertical markets
• Common problems and pain points
• Similar economic impacts
• Similar groups of users

42. 42
Assess Profiles against Critical Flaws
• Assess each profile against 5 key criteria that can “make or break” your chance of
succeeding in that segment
• Ask and answer a series of questions and rate the answers on a binary scale of yes
or no. Include a sentence or two on why.
• Eliminate any that fail and set aside all related segments
• Questions :
• Do They Have a Reason to Buy? Is the financial impact of the problem severe enough to drive the need of
a solution ? Of all possible ways of solving the problem, is yours the obvious choice
• What Do They Actually Need to Buy to Solve the Problem? deliver the “whole product”?
• Who Else Can They Buy From?
• Can They Buy?
Criteria Yes No Reason
Segment: Produce Reefer Location for Carrier Cies
Compelling reason to buy √
Deliver whole product
√
Buyer with economic power √
No competition
√

43. 43
Assess Variables + Rank them
At What Price Will They Buy At?
How Are They Going to Buy?
Why Should They Buy From You?
Will the Segment Survive?
Are There Adjacent Segments That You Can
Jump To?
Rank each variable on a scale of one to five
Rank all segments and eliminate weakest 50%
• Use totals as an overall indication
• Weight variables according to your
flexibility or ability to change your situation
Repeat ranking exercise until top one or two
segments revealed
Assess Variables Ranking
Example

44. 44
Assess Variables + Rank them
Finalise Question Answer Fact Assum Action
Unless you have unlimited time and money, rationalize all the profiles into segment groups
Create Groups
According to
Similarities
Vertical markets
Common problems and pain points
Similar economic impacts
Similar groups of users
Rank them / Prioritize
Assess Variables
• At What Price Will They Buy At?
• How Are They Going to Buy?
• Why Should They Buy From You?
• Will the Segment Survive?
• Are There Adjacent Segments That
You Can Jump To? Beachhead strategy
Ranking
• Rank each variable on a scale of one
to five
• Rank all segments and eliminate
weakest 50%
 Use totals as an overall
indication
 Weight variables according to
your flexibility or ability to
change your situation
• Repeat ranking exercise until top one
or two segments revealed

45. 45
Assess Variables + Rank them :
Example

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46
The components of Target Market segmentation
6. Assess „ Happy Few „
against SWOT & KPI

47. 47
Rate Final Segment Against Final
Criteria – Can You Win It?
• Undergo a SWOT exercise in relation to segment
• Involve all internal stakeholders and decision makers
• Rate chances of success against corporate weaknesses and strengths
• Assess segment honestly against core competencies
• Technology bias
• Marketing ability
• R&D ability
• Build one and two year financial models to assess revenue potential,
profitability, share, growth
• Can you live with the risk of failure
• What is the cost of failure?
• Can the company survive?
• Establish Performance Goals / KPI’s
• Rate your chances with remaining customer profiles against KPI
• Update if necessary your Value Proposition

48. “
”
48
The components of Target Market segmentation
7. Next Steps
IN or OUT

49. 49
Create the Business Model or Repeat the
process
Business Model

50. 50
Initial Approach : Search not execute
a structured process for testing business model hypothesis
Think
Plan
ExecuteAnalyse
Adapt
Think
Plan
ExecuteAnalyse
Adapt
Understand Customer
Problem and Need
Develop Validate
Develop Repeatable
Business Model
Adaptive
Learning
When not enough paying customers
GTM
?