A wise man once said, “There is no market; there are only market segments”.
Simply put, a market is a group of buyers that are willing and able to buy your product or solution. A market is made up sub-markets or “market segments”; market segments are groups of potential buyers who have similar wants, needs, experiences, or problems.
For example, there is a market made up of coffee buyers, but it can be divided into many market segments. One coffee buyer market segment is the group of coffee drinkers who will pay two times the normal price of a regular cup of coffee to enjoy the coffee found at Starbucks. Starbucks has a grip on its market segment that is so powerful that coffee drinkers endure long lines and ridiculous prices for the chance to drink an overly bitter and burnt cup of coffee.
Think I am full of it? Consumer Reports just completed an independent test comparing the coffee at Burger King, McDonalds, Starbucks, and Dunkin’ Donuts. Guess what? McDonalds won! But I digress. And, it does not matter what I think anyway; it is what the Starbucks market segment thinks, since they vote with their dollars.
To truly understand a market segment (i.e. why Starbucks buyers must have their “Grande Latte” every morning) you need to be able answer the following six questions:
– Who are they?
– What do they want to buy?
– How do they want to buy?
– When do they want to buy?
– Where do they want to buy?
– Why do they want to buy?
After you answer these questions, you are ready to serve your target market. Starbucks anyone?
John Bradley Jackson
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