Sunday, November 27, 2016

STARTUP LESSONS : Identifying Target Segment and Market Sizing

Understanding your Target Segment

UC When you start, you have the temptation to reach out to as many customer segments as you can - but is that the right strategy? Should you stay focused or spread yourself across segments?

Identifying the right customer segment for your venture idea is important. Equally important is the ability to dissect the customer segment. Doing this allows you to narrow your focus on the right segment and thus, market your products to a focused audience, with predictably better results. Let's first understand market segmentation in detail:

In order to identify the target segment, you should:
  1. Segment your market correctly, based on Geographic, Demographic and Behavioural traits
  2. Arrive at the value proposition of your product or service and customer's willingness to pay
  3. Bring out an offering that is significantly better than the current options available in the market. Being incrementally better may not be very helpful.
  4. Assess the size and growth of the relevant market segment
  5. Once you have established yourself in a particular segment, you should consider the ability to enter adjacent segments