The Importance of Market Segments
The Importance of Market Segments
The Importance of Market Segments
by John McMillan
© 2013 All rights reserved
The Importance of Market Segments
The Importance of Market Segments
Successful companies almost all have a significant market share; it is rare for more than three or four companies to be truly successful in any segment of the market. It is not unusual for one company to dominate with every other company trying to catch up.
Consider some examples.
There are around three really successful supermarkets in the UK, with Tesco dominating Software is dominated by Microsoft and Google.
BMW, Mercedes and Audi dominate the market for executive cars
For many years. the US car market was dominated by just Ford and General Motors with American Motors trailing
Market segments are important because they allow any company to take a high share of a segment or niche.
Why a High Market Share Matters
A high market share is important for a number of reasons.
Marketing becomes very much easier if you are a big player in your market place.
A main reason is that buyers only check a small number of companies and you must make sure you are one of these. Buyers are more likely to deal with companies they know and trust. Once you are seen as a market leader it generates a comfort factor.
Consumers take comfort in the fact that so many other people have bought from you and they assume you must be good and they trust you.
When you become one of the main players you become more visible. Because more people have bought products or services from you, more people see and hear about you. This produces a virtuous circle. PR becomes easier. You establish credibility and your reputation grows. Your brand becomes established. People come to you. If you are not a big player you will always struggle to be seen.
“We identified you need a minimum 5% to stay in the game. You fall off the customers’ radar if you’re too small” – British tour operator.
The Importance of Market Segments
by John McMillan
© 2013 All rights reserved
The Importance of Market Segments
The Importance of Market Segments
Successful companies almost all have a significant market share; it is rare for more than three or four companies to be truly successful in any segment of the market. It is not unusual for one company to dominate with every other company trying to catch up.
Consider some examples.
There are around three really successful supermarkets in the UK, with Tesco dominating Software is dominated by Microsoft and Google.
BMW, Mercedes and Audi dominate the market for executive cars
For many years. the US car market was dominated by just Ford and General Motors with American Motors trailing
Market segments are important because they allow any company to take a high share of a segment or niche.
Why a High Market Share Matters
A high market share is important for a number of reasons.
Marketing becomes very much easier if you are a big player in your market place.
A main reason is that buyers only check a small number of companies and you must make sure you are one of these. Buyers are more likely to deal with companies they know and trust. Once you are seen as a market leader it generates a comfort factor.
Consumers take comfort in the fact that so many other people have bought from you and they assume you must be good and they trust you.
When you become one of the main players you become more visible. Because more people have bought products or services from you, more people see and hear about you. This produces a virtuous circle. PR becomes easier. You establish credibility and your reputation grows. Your brand becomes established. People come to you. If you are not a big player you will always struggle to be seen.
“We identified you need a minimum 5% to stay in the game. You fall off the customers’ radar if you’re too small” – British tour operator.