Real, Distinctive, Viable and Measurable Segments
So, let’s imagine you have identified a number of market segments that you think might be worth pursuing. How might you decide which market segments should your pursue?
A good approach is to establish which ones are real, distinctive viable and measurable. Let’s walk through each of these to get a better understanding,
Real
It may sound obvious but if a segment doesn’t actually exist, then any marketing activities within it will be totally lost. So how can you identify a segment that doesn’t exist? Well, here’s a few thoughts:
- A segment may exist in principle, but may not exist in certain markets due to local obstacles like laws or traditions.
- A segment must be identifiable so that you can determine which customers belong to a segment and which do not.
- A segment needs to be reachable and relatively easy to enter, this will enable you to deliver your offering.
- Finally, you must be able to operate within it a segment. Inability to do so effectively renders it unreal in the non awesome sense of the word
Distinctive
A segment needs to be clearly defined to be absolutely clear about which part of the market your marketing activities will be focused on. Failure to do that and you run the risk that your marketing efforts spilling over into other segments.
Viable
The key question to ask yourself here is “can we make a profit from it?”. A segment needs to substantial enough to make it financially worth pursuing.
Measurable
The key question to ask yourself here is “can we obtain realistic data to consider its potential?”. And this in turn answers the question “did my marketing efforts work?”
It is important to understand the size of existing sales within the segment as a baseline for future measurement. In addition, knowledge of sales growth within the segment will contribute to measurability.
What’s Next
Next up we’ll talk about how to evaluate the profitability and stability of market segments.