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How to Implement a Winning Segment Strategy

by Steve Bassill  |  
February 21, 2006

Have you learned the best way to identify and serve customers in your target segments?

Segmentation could be the marketing tool that sets your company apart from the competition. The business organization that goes all the way from developing a winning segment strategy to committing the resources needed to implement the strategy will be more profitable.

One of the basic segmentation rules is that the segment must be "reachable." It's essential for marketers to have the ability to identify and serve customers in the target segment.

However, in today's complex business environment, markets are becoming more and more fragmented. When you consider the increased number of niches, you realize what a daunting task it is for businesses to deliver across so many segments.

A quick review of basic segmentation theory illustrates why this is the case. The simplest way to think about market segments is to picture different colored balls—each color represents a customer segment with unique application needs.

In the power tool industry, for example, there are three very basic segments: the do-it-yourself individual; the craftsman (who is more than a casual tool user); and the professional (who handles the tool for a living). At a minimum, the colored balls represent three distinct segments.

After segmenting customers based on tool application, marketers have several tasks to execute before they can adequately serve these segments. Let's take a look at the classic four "Ps" of marketing:

  1. Product: Do you have products that meet the specific needs of each, or any segment? Meeting the customer's needs relates to the product's performance, look and feel, brand image, ease of purchase, and ease of use.

  2. Place: Do or can you offer your product for sale where the customer wants to buy it? You must have the distribution channels in place to intercept buyers wherever they shop.

  3. Promotion: Have you created messages designed to communicate your product's features and target those customers most likely to buy? Effective vehicles include trade shows, advertising, word of mouth, and the Internet.

  4. Price: Are you in the right price band for your target customers? You don't have to be the least expensive, but you have to be considered competitive.

You must align your segments for success. What makes alignment so important to segmentation is that all four of these variables could be different for each segment you target. The greater the difference between the needs of each segment, the more essential it becomes to customize your offering and organization. Ask yourself: Are you prepared to back up your product with the features and support that your customers require?

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Steve Bassill is president of QDI Strategies, Inc. (, a marketing consulting firm. Reach him at

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