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UTILIZING SEGMENTATION ANALYSIS; INTERNALLY and EXTERNALLY!

By Amarendra Bhushan for CEOWORLD Magazine Updated:February 2, 2009

UTILIZING SEGMENTATION ANALYSIS INTERNALLY and EXTERNALLY FOR BUSINESS DEVELOPMENT and MARKETING

Segmentation analysis is often referred to by other names such as;

Conjoint analysis

Market segmentation

Niches

Niche marketing

Niche selling

Target marketing

Segmentation typically is used to identify markets that organizations concentrate marketing and selling their products and services to.

This approach comes short of utilizing segmentation, both internally and externally, for more progressive business development and marketing.

The reason for not utilizing it more progressively is simply that individuals may not have the training, experience and knowledge for doing this.

I will proceed to discuss how to utilize segmentation, both internally and externally, and how to expand the use of it for more progressive business development and marketing.

Just to establish some fundamentals, let’s define market segmentation.

This refers to what part of a market one is targeting.

It is narrowly defined and in detail.

So, if you are targeting or focusing on any market, the market segment is a narrow definition of what the smaller part of that market is that you are actually focusing on.

In example let’s say your target market is adults.

Your market segment definition needs to answer the following;

What age group?

Male, female or both?

Married or not married or divorced or separated?

What nationality?

Citizen or non-citizen?

What religion, possibly?

What occupation, possibly?

What state of health, possibly?

What geographic location currently living?

What geographic location grew up in before relocating, possibly?

Political preference possibly?

Education level, both level of degree and type of subject?

Number of children?

Ages of children?

Buying preference for a variety of things; cars, houses, etc. etc etc.?

Preference for retail stores?

Preference type of food?

Preference for type of restaurants?

Type of house & size currently living in?

Ownership vs. renting of house?

Own or lease their autos?

We can go on with many other details and questions.

Your market segment is not adults.

It is more defined with more details.

You can see that the details lead to a narrowly defined part of a market.

The definition for such is a combination of many criteria; behavioral, geographic,

demographics, psycho social, social, and others.

We can do this same thing with any market being targeted; medical, healthcare, industrial, computers, telecommunications, electronics, chemical, science, construction and All Others.

A business, company or organization may have several market segments that they target.

For the First Step, in detail, narrowly define your market segments:

List your accounts or types of customers that you current do business with.

Identify the detailed market segments.

List accounts or types of customers you once did business with in the past 2-10 years but no longer.

Identify the detailed market segments.

List accounts or types of customers you desire to target in the near future.

Identify the detailed market segments.

Now start looking for patterns and other insights.

Starting analyzing what this information is indicating or not indicating.

Analyze this information as a group to gain different perspectives and ideas.

For the Second Step; analyze deeper;

Per each detailed market segment, past and current, list the following information;

1. Products and services sold
2. Sales dollars of products and services per year
3. Quantity of products and services per year
4. Profit margins
5. Geographics and demographics of sales
6. Marketing efforts and costs
7. Sales efforts, sales support and costs
8. Competition nationally and internationally, with names, numbers and sales dollars
9. Chart/graph the products and services over years
10. Chart/graph the sales dollars over several years
11. Chart/graph the sales quantity/volume over years
12. Chart/graph the profit margins over years
13. Chart/graph the geographics and demographics over years
14. Chart/graph the marketing efforts and costs over years
15. Chart/graph the sales efforts, sales support, and costs over years
16. Chart/graph the competition information over years

It is important to put all information and data into a chart or graph.

When information is put into a picture format such as a graph and graph, it becomes more meaningful and commands attention.

As a group, start analyzing this information and look for patterns.

A group approach is needed to gain ideas, different perspectives and insights.

What other information needs to be added to this list?

Where have you gained and why?

What have you lost and why?

Where are obvious opportunities?

What is the information indicating or not indicating?

What things do you need to be more of?

What things do you need to do less of?

What things are jumping out at you and now look so obvious?

When comparing the list of previous older accounts both those still with you and no longer with you to the newer accounts, be sure to compare products and services purchased, sales dollars, quantities, profit margin and market segments.

This is usually a real eye opener that reveals considerable valuable insights.

For the Third Step,

1. Compare each of the above to all market segments

2. Chart/graph the comparisons

Again, as a group analyze the information and the charts/graphs.

For the Fourth Step

Discuss the findings, what actions are needed with a time line and why.

Gathering and charting/graphing the information will need the cooperation of numerous staff from several functions and departments.

The tasks need to be assigned to staff with time lines and coordinated appropriately.

This process requires the senior management and executive level participation and leading this.

A professional senior level business consultant can be utilized to facilitate and manage this process but again, senior management participation is still needed.

From this in-depth information, organizations will be able to be more accurate and intelligent with their decisions about the business, changes and growth.

Determining what, how and why to decrease, expand and change is progressively establishing business development, sales and marketing strategies.

Utilizing this process and approach will have significant positive results on your business development, sales and marketing efforts.

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