1.1 Customer segments
A distinct group of customers with a similar customer profile or characteristics (e.g. demographics, needs, lifestyle) can be considered a customer segment. In Week 4, this block was named Customer Profile as part of the Value Proposition Canvas.
There are several ways to define customer segments, and some techniques are applied in marketing.
It is important to consider some fundamental aspects: the first is whether the business model is targeting a mass market or a niche market.
A mass market is often found for products that are not largely customised. Examples of mass markets are groceries, electronics and food.
A niche market serves a limited group of customers. For instance, specialised sports equipment is typically for a niche market. In this case, producers invest in developing new materials to enhance the performance of athletes.
In some cases, it is possible to serve more than one segment of clients. Therefore, in this block, the second question to ask is: what customer segments is the business model targeting? In Week 2 you were introduced to matchmaking and multi-sided business models. These models often combine different segments of customers, so it is important to consider what is valuable to each customer segment you target.
Some customers segments are more accessible when customer relationships are developed that enable you to approach them specifically. This will be discussed in the next sections on customer relationships and channels.