Market Segmentation

Posted by Ventures Online on Tue Oct 27 2020
The single necessary and sufficient condition for a business is a paying customer. The day someone pays you money for your product or service, you have a business, and not a day before. A great, sustainable business is one that is able to accumulate enough customers paying enough money, within a relatively short period of time, so as to ensure that it does not run out of capital but becomes profitable.

The best way for a startup to lay the foundation for a great, sustainable business is to dominate a narrow and carefully defined market that serves a particular end user. To choose the best market, you need to conduct a Market Segmentation procedure that uses primary market research to pinpoint the best markets on which to focus your efforts.

Market segmentation is the process of dividing a target market into smaller, more defined categories. It segments customers and audiences into groups that share similar characteristics such as demographics, interests, needs, or location. This procedure will ultimately make it easier to focus your efforts and resources on reaching the most valuable audiences and achieve your business goals. It is the first step in getting to know your customers, identifying what is needed in your market segment, and determining how you can best meet those needs with your product or service.

Once you have defined your narrow market, you will have to conduct primary market research in order to verify or refute any assumptions you will have made about customers in the market you identified. Primary market research entails going directly to your prospective customers to ask questions and gather information about their situations, pain points, opportunities, and market information.