3.1 Market Segments

Explanation

Include all segments of the market whether you will be selling to them or not. It is just as important to understand the segments you will not address as those that you will. For example, if you are planning on a fine dining restaurant you will not be attracting the fast food segment but you should understand that segment as a part of the overall market. Choose the segments most important to the market and group the remaining segments into an "Other" category.

For example, if you were AMTRAK, you might describe yourself as being in the transportation business and offering your services to two market segments, recreational and business travelers.

If you were DELL Computer, you might say you were in the PC, Server and ISP markets addressing the business and individual consumer communities. Each of these would then be broken down into segments. EG: the PC market might segment into individual consumers, small business and large business.

If you are selling to other businesses (B2B) some examples might be:

Industry by SIC code
This is especially beneficial for vertical market offerings.
Size - revenues, # employees, # locations
In general if your offering is highly sophisticated, requires significant resources or provides greater value based on volume, then the target should be the larger enterprises.
Climate
Examples of offerings might be dehumidifiers in areas near the ocean or snow plows in northern areas.
Language
An example of a language specific service is a Spanish TV channel.
Status in the industry
You might want to target businesses that are the technology leader or revenue leader or employee satisfaction leader, etc.
Accessibility
To minimize promotion and sales expense you may want to target urban rather than rural or local rather than national prospects.
Access (or lack of access) to competitive offerings
Cable TV business's significant investment in their service delivery system has allowed a near monopoly for some time. IBM's service reputation insured minimal competition during the mainframe days.

If you are selling to individual consumers some examples might be:
Creation of or response to a fad
Examples are hula hoops, Jurassic Park T-shirts, pet rock, physical fitness, etc.
Geographic location
Marketers take advantage of location by selling suntan lotion in Hawaii, fur coats in Alaska, etc.
Time related factors
You may be able to target vacationers in summer, impulse buyers during the holidays or commuters at 7AM.
Social status
This could include country club memberships, philanthropic contributions, etc.
Education
Product and service examples are encyclopedias, scientific calculators, learning to read tools and financial counseling.
Avocation
This could include products for hunting, fishing, golf, art work, knitting, etc.

Sample from CitiLoc, Inc.