2 x 2 segmentation matrix

I ran a series of marketing workshops a few months ago, covering a pretty wide range of topics in a relatively short space of time. It was quick-fire, perhaps 30 minutes on a topic and then an exercise to put into practice what we’d discussed.

The one area that people struggled with the most was segmentation, and the task of segmenting your market. It’s easy to see why. It’s a really important part of the marketing process. How you segment your market determines who you will sell to, and also who you will compete against. Segmentation can be basic, such as by country, region, or company size, or it can be more sophisticated, covering groupings around values, or buying criteria.

Generally, you see people pick two axes against which to judge their segments or groups. For example, one axis might be how easy it is for us to sell to each group, and the other might be how attractive is this group to us. Then you plot each group against these two axes – low, medium or high – to decide which quadrant or group is worth targeting.

The trouble is, how you group your companies, and which axes you choose to judge them against – and there could be many possible axes – is critical. Bad decisions here can lead to you targeting bad companies, bad for you that is. Also, you could end up competing against the wrong competitors. As this post reminds us, if you know your market, define it, and segment it better than anyone else, you may find yourself to be the only competitor.