Changing the Way the World Thinks about Strategy
Market Segmentation

Market Segmentation

Market segmentation is a powerful tool.  This isn’t just true for the marketing department, though segmentation can enable super efficient, targeted advertising and product placements.  In strategic planning, however, your market segmentation can enable even more unique product offerings, operational strategies and more.

Unfortunately, the vast majority of companies who use market segmentation, tend to use exactly the same segmentation as their competitors.

Quite simply, this means that you and your competitors can end up targeting EXACTLY the same customers with very similar products, pricing and operational approaches.  Furthermore, we all know what happens when you offer a customer the same product in the same package.  Consequently, they tend to start looking at price very carefully, and profitability suffers.

Some of the most profitable strategies I’ve worked on target highly difficult segments.

For example, instead of simply targeting customers by industry, one B2B client used high difficulty as a segment.  Instead of focusing on, say, cosmetics customers, they looked for customers who had difficult applications.  Alternatively, they looked for customers who were hard to please in some specific way, such as product design.  Furthermore, by gravitating towards such customers, the company was able to more than double profitability in a five-year period.  As a result, one of their core industrial markets even shrank by 40% during that period.   Think about how market segment differentiation can lead to higher profits.  Ultimately, where their old market segmentation would have resulted in millions of profits lost, this company made millions more, and grew their sales by 16% per year.

Think about this in your company

Is there a type of customer that you could target and serve better than any of your competitors?  Otherwise, is there a different way you could think about which customers generate profit for you?  If you’d like to seriously address this question, take a look at Simplified Strategic Planning.  It’s not your old strategic planning, and it will get you better results.

For great ideas on how to improve your market segmentation, contact me at   Consider holding a one-day workshop on Simplified Strategic Planning.In-house Workshop

Robert Bradford is President & CEO of the Center for Simplified Strategic Planning, Inc.  He can be reached at

M. Dana Baldwin is Senior Strategist with Center for Simplified Strategic Planning, Inc. He can be reached by email at:

Co-Author, M. Dana Baldwin

Robert Bradford

Co-Author, Robert Bradford



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