Segmentation is essentially the identification of subsets of buyers within a market who share similar needs and who demonstrate similar buyer behaviour. The world is made up from billions of buyers with their own sets of needs and behaviour. Segmentation aims to match groups of purchasers with the same set of needs and buyer behaviour. Such a group is known as a 'segment'.
Segmentation is a form of critical evaluation rather than a prescribed process or system, and hence no two markets are defined and segmented in the same way. However there are a number of underpinning criteria that assist us with segmentation:
- Is the segment viable? Can we make a profit from it?
- Is the segment accessible? How easy is it for us to get into the segment?
- Is the segment measurable? Can we obtain realistic data to consider its potential?
The 'Segmentation Matrix Business Battlemap' is a useful segmentation tool. The various products are then plotted on a matrix against market segment. The result is a 'battlemap' (William A Cohen, 1986). This is developed for policy processes in the influence map.
This tool first appeared in the ODI Toolkit, Tools for Policy Impact