Market Segmentation

Every group of business plan consultants knows that a company's market segmentation is a vital part of its overall strategy, and must be clearly defined in any successful business plan. If you are confused about what your business' market segmentation will be, or if you're unsure about what your business plan market segmentation section should say, you have several options: you can confer with business plan consultants, research the question online, or contact the SBA for advice. If you feel you don't know enough about your potential customers to write a section about them in your business plan, then you need to try to categorize them in such a way that will make the groups easier to define and explore.

The concept of market segmentation is a vitally important one, crucial to an accurate market assessment and strategy. You need to try to divide your target market into manageable segments like income brackets, age, geography, product type, race, consumer spending index, buying patterns, customer needs, and other classifications. By defining the terms of your prospective buyers, you in turn define your market. Your specific segmentation can speak volumes about your customers, and can help refine the list of competitors you've developed and studied. For example, by segmenting your target market more finitely, you might discover that your products do not really face competition from a more general item that appeared at first to pose a direct competitive threat. Business plan consultants can help you perform this sort of "business thin-slicing"—market segmentation is a talent that marketing experts and business plan consultants understand keenly.

When you consider how different the content, voice, and images are in commercials targeting adults versus those designed for children (compare a mattress store advertisement, for example, to an ad for a board game), you can quickly appreciate that market segmentation is a "concept in action." This makes it all the more important for your business. If your competitors are striving to narrow and hone the definition of their target market, they are probably gaining a competitive advantage over your business model. You should meet with business plan consultants, perform research online, or contact organizations within your industry to get to get the best possible grasp on your true market segmentation.