Should I Segment my Market at Market/Sub Market or Product Market Level?

[Syranius Apostle]

I am currently helping someone, with their Business Plan, for a 'Home & Leisure' Business venture. I have reached the 'Marketing Strategy' of the Business Plan, where I have become a little stuck with the Market Segmentation process.

As mentioned, the chosen Market has been defined as the 'Home & Leisure' Market. Making up this broader Market, are a series of Sub Markets, as follows:

• Wall Art & Decor
• Stationary
• Fashion
• Furnishings

Making up the 'Wall Art & Decor' Sub Market, are:

• Canvas Prints
• Wall Decal
• Clocks

My question is, would the above (Canvas Prints, Wall Decal and Clocks) be considered as the Product Markets or would they be considered as Sub Markets within a Sub Market, since there are more Categories within these? For example, Canvas Prints, would be made up of:

• Floral
• Landscape
• Seascape

Once I have clearly defined my Market, Sub Markets and Product Markets, should Segmentation then occur at the Market/Sub Market Level or Product Market level?

After a few weeks of reading, I have confused myself on the matter, with so many variations to each approach, so any insights on this, would be greatly appreciated.

Thanks, in advance.

 

[WebshopMechanic]

Hi @Syranius Apostle

The way I see it, Canvas Prints, Wall Decal, and Clocks would be a sub-market because there are still variants within each of those.

Like you point out, Canvas Prints can be broken down in Floral, Landscape, Seascape, etc, and I would see these as product markets within the sub-market because they are serving totally different customers.

The whole point of segmentation is to enable you to specific customer needs, pain points, and behaviours so you can target them with more tailored and compelling messaging.

Of course, you could probably drill down even further in some instances but that may be too niche and may limit your market potential.

The key is to get to the level where you reach a specific customer type or persona.

Matt

 

[Syranius Apostle]

Hi @WebshopMechanic

Thanks for your time, in replying.

My initial approach to defining the Market, was as you suggested; in that 'Canvas Prints', 'Wall Decal' and 'Clocks' etc being identified as the 'Sub Markets'. Should I continue with this approach, would you say that 'Canvas Prints', 'Wall Decal' and 'Clocks' should be referred as Sub Markets, or would a more suitable term (such as 'Micro Sub Market' or 'Sub Sub Market' etc) be more apt, since these Sub Markets fall within the broader Sub Market of 'Wall & Decor'?

On the note of Segmentation, I understand that it is good practice to ensure that each Sub Market should be made up of Heterogeneous Market Segments, in that each Market Segment should be unique. Would you say that this only applies to each individual Sub Market?

Example
For simplicity for this question, lets say I have 2 Market Segments; 'Budget Conscious' and 'High End'. Would you say it to be perfectly plausible to have the 'Budget Conscious' Market Segment appear within both the 'Floral Canvas Prints' and 'Landscape Canvas Prints' Product Markets, since they are different Markets?

Once again, many thanks for taking the time to provide your own insight on this matter.

Craig

 

[WebshopMechanic]

Hi Craig,

I've just been doing a bit of digging around and I think I may have to correct myself. It looks like Wall Decal and Clocks may be Product Sub Markets as you suggested.

See: http://www.segmentationstudyguide.c...rket/markets-sub-markets-and-product-markets/

I would also agree with your example where you would have budget-conscious inside both Product Sub Markets since they are a different customer.

It's a bit like being down the pub. You get people who buy the cheapest beer and the cheapest cider. Different product sub markets and different customer but they drink in the same place (Sub Market = Pub) inside the same Market (Leisure).

I think that makes sense? All I've done now is made myself fancy a quick Thatchers before bed.

Matt

 

[Syranius Apostle]

Hi Matt,

Thanks for having a dig around. I have actually spent the last few days, spending time on the website, you have linked to. It is worth a read, for anyone looking to get an understanding on Market Segmentation.

I have gone with breaking up the Market, as follows:

Market: 'Home & Leisure'
Sub Market: 'Art & Wall Decor'
Product Market: 'Canvas Prints'
Product Sub Markets: 'Floral', 'Landscapes' etc

I would be keen to know if, in theory, you could potentially Segment at any level of the above Markets. I see it as a matter of choice, as to how far you would want to drill down into the market. Obviously, trying to get the right balance between niche and market volume etc.

I have seen some examples, whereby Companies initially break up their Sub Markets into Geographical Segments, then continue Segments the Product Market via Consumer Needs etc. To apply to this question, a company may break up the Market into 'England', 'Scotland' and 'Wales'. Is there any reason why a Company would want to Segment via Location, at the Market Level rather than Product Market Level? I am just wondering if this is a matter of preference, or whether there is a 'right' or 'wrong' way here. As a matter of 'keeping things tidy', wouldn't it just be neater so to speak, to place all of the Segmentation in one place or am I missing something here?

As for the Thatchers, it has to be 'Mixed Fruit', for me!

Craig

 

[ethical PR]

Hi @Syranius Apostle

You don't mention anywhere who your target market is for the various products. And who influences them.

Geographical location is important because then you know which areas you need to include in your marketing efforts. A retailer, landscaper or restaurant may have a small catchment area whereas an online platform could target international clients.

If you don't have expertise as a marketer, your client might want to engage someone with suitable expertise to estimate a marketing budget and activity relevant to your target market.

 

[Syranius Apostle]

Hi @ethical PR

Thanks for your input.

The reason for not mentioning the desired Target Market, is because it has not been identified as of yet. I am at the early stages of the Segmentation process, where I need to identify potential Market Segments, in order to draw up potential Target Markets for consideration. Prior to identifying the Market Segments, using the Segmentation Tree approach, I need to ensure that I have approached the Market Definitions correctly. I have an understanding of the theoretical differences between Market, Sub Market and Product Market but looking for further clarification on its 'right' application, in a practical/real life setting.

I understand that as well as there being a Science to this, there is also an Art. Therefore, there is going to be a degree subjectivity in the 'right' way to approach the whole 'Segmentation, Targeting and Positioning' process.

In reference to my latest Post on this Thread, I was curious to know as to why some companies implement a Geographical Segment Base at the Sub Market Level, rather than at the Market Segment level. Is it merely a preferred way of organisation (especially for International Companies) or is there other underlying reasons, which I may be overlooking, since both approaches would ultimately produce the same Target Markets?

I hope my below examples serves to further illustrate my point here, on how the differing approaches, ultimately produce the same potential Target Markets:

Example 1:
Sub Market: Stationary.
Sub Market Level Segmentation Base: Geographical (UK)
Market Segment: Upper Class
The above approach would produce a Market Segment Profile of 'UK Upper Class'.

Example 2:
Sub Market: Stationary
Sub Market Level Segmentation Base: None.
Market Segment: UK Upper Class
Since this example does not integrate a Geographical Segmentation Base at the Sub Market Level, we then end up with potentially broad Market Segments. Should we still wish to Segment via Geography (as well as others such as Benefits etc), we could simply implement a Hybrid approach of using Geographical and Benefit Segmentation Bases at the Market Segment Level. Ultimately, producing the same Market Segments for Target Market considerations.

From a logical and organisational perspective, I can see the advantages of placing a 'market wide' Segmentation Base at the Sub Market Level, rather than at the Market Segment Level. I am just curious to know, if there are other reasons for this, that I have not considered.

Craig

 

[GraemeL]

How big a business is this to be? Is this for a presentation? Seems very detailed and 'textbook' type plan to me. If I read something with this structure I would say it was academic rather than real life.

 

[Syranius Apostle]

@GraemeL ... The vision is to eventually expand into multiple Sub Markets. For the time being, however, the focus will simply be on the 'Art & Decor' Sub Market. Personally, I am very academic at times. I like to approach tasks in a methodical manner, ensuring that all bases are covered so to speak. Maybe I am over thinking the process, in an attempt to be 'perfect'. Regardless, feedback on my approaches and methodologies are always welcome.