Market Segments & Value Propositions

February 10, 2015

Agenda4:30pm – 4:50pm (Discussion)

Segmentation & TargetingIdentifying the right customers

Value Proposition Development:Creating value for those customers

4:50pm – 5:30pm (Activity)

Value Proposition Building

SegmentationGroup

customers based

on similar needsProfile each

segment

TargetingAssess

attractiveness of

each segment

Select segment

s to target

Positioning

Define value

proposition for target

segmentsDevelop an action

plan

What is the market segmentation process?

Why is it so important?

1. It allows the firm to develop products/services that meet customer needs.

2. It identifies new opportunities to address unmet needs.

3. It saves money, time, and energy.

Segmentation benefits both buyer & seller.

How did the 2012 Obama campaign segment the market?

Geographic

Demographic

Psychographic

Behavioral

Benefits Sought

Segmentation is part science, part art.

Source: Compass Labs

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Segmentation variables in B2C markets

Variable Description

Geographic Country, City, Region, Urban vs Rural, Climate

Demographic Age, Income, Gender, Generation, Marital Status, Family Size, Occupation

Psychographic Lifestyle, Personality, Activities, Interests, Opinions,

Behavioral Usage Rate, Loyalty, Product Knowledge, Involvement, Decision, Purchase Occasion

Benefits Sought Convenience, Value, Safety, Status

Segmentation variables in B2B marketsVariable Description

Geographic Country, City, Region, Urban vs Rural, Climate

Firmographic Industry, Firm Size, Global/Regional, Ownership Structure

Buying Approach

Centralized / Decentralized, Purchase policies, Involvement of Decision Makers

Behavioral Volume, Loyalty, Attitude toward risk, Purchase frequency, Urgency

Benefits Sought Price, Product quality, Customer service, Relationship

How do this work?

Value Proposition Development

A value proposition is not a list of featuresInstead: A value proposition describes the benefits that customers can expect from your products and services.

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Begin by understanding your customer.

Jobs

Pains

Gains

And match them with your business.