Effective tools to help small B2C businesses segment and target their best customers in a trade zone using Market Segmentation tools from the Arkansas State University Small Business and Technology Development Center

1. Really Simple Market Research Tools to Help Any Small
Business Find the RIGHT Customers
By Herb Lawrence, Arkansas State University Small Business Development Center
Most successful entrepreneurs know that long‐term growth comes from
developing lasting relationships with their customers. These business owners
know that it is not the product they sell nor the service they offer, it is their
ability to establish and maintain meaningful relationships with a specific segment of buyers where
both parties value what they
receive from one another.
Obviously you can’t develop
meaningful relationships with
every possible customer in
your market area, nor should
you try.
Instead savvy marketers find
ways to narrow the field to
locate those segments of
customers who would most
value a relationship with their
business that will result in
mutual benefit to both parties.
For retailers and service
related businesses operating in
a specific geographical trade
zone, the challenge is how to
divide up all of the household
consumer units in their trade
zone into meaningful sub
groups that share:
 similar traits,
 demographic
features,
 even life styles
To whom they can deliver an effective marketing message that is most likely to spark interest in
that consumer.

2. The challenge most small businesses face when they attempt to segment their markets is a lack of
access to meaningful information upon which to make rational decisions.
In the business world whether it is Wall Street or Main Street the access to the right information is the
difference between success and failure. But in this electronic world of information overload, mining
relevant data and then putting that data into a coherent plan is often a daunting task for small business
owners.
Knowledge is power in the business world but finding relevant information, understanding how to
interpret the information and then putting that information
 Insights into the lifestyle to a usable plan is often seen as an impossible task.
characteristics of your
Many of our small business clients at the Arkansas State
BEST customers
University Small Business and Technology Development
 Pictures or maps of
Center mistakenly believe that developing effective market
where these customer
segmentation plans would:
groups live
 Plans to target  take too much time just to research all of the
previously underserved possible information sources,
neighborhoods and  would cost a fortune to hire some fancy market
develop new research firm, or
opportunities  Take a Ph.D. in Marketing just to figure it out.
 Strategies that attract
customers to stores Nothing is further from the truth!
repeatedly to purchase
your products or This map shown above, called a Dominant Tapestry Map, I
services. pulled information from one of our rural counties in North‐
Central Arkansas.
PINPOINT CORE CUSTOMER This map of Independence and surrounding counties
GROUPS OR GROUPS WITH provides a visual representation for any retailer or service
OPPORTUNITY USING MARKET business to use that segments the trade zone into seven
SEGMENTATION. dominant groups based on a concept called Community
Tapestry Segments.
These segments were developed by ESRI
Business Information Solutions and can be
applied to any geographic trade zone.
It is based on a concept that any business
can use segmentation to divide and group
their markets to more precisely target only
their business customers and prospects if they have the right
tools.

3. Segmentation operates on the theory that “people with similar tastes,
lifestyles and behaviors seek others with the same tastes and lifestyles” (the
idea that “like seeks like”) and that these behaviors can be:
 measured,
 predicted,
 And targeted.
This Community Tapestry Segmentation System combines the WHO of
lifestyle traits with the WHERE of local neighborhood geography to create a tapestry of various lifestyle
segments of actual neighborhoods or distinct behavior market segments.
In my example you will notice
that in each differently shaded
section of the map are sets of
numbers. These numbers
relate to one of 66 distinct
groups of households who
display similar features.
In the map around the
Batesville area the number 42
is the most prevalent. Those
household clusters listed as
number 42 are named
Southern Satellites by ESRI.
If a consumer lives in an area
listed as a Southern Satellite
segment that consumer is
most likely to display similar
demographic and
socioeconomic factors with his
neighbors.
Additionally residential factors
in that segment tend to be
similar AND the preferences of
those households are similar.
What do we know about typical households in the Southern Satellite Segment?
Demographically, the households in the Southern Satellite area are primarily found in rural south. It is:

4.  Sparsely populated market segments in the country,
 Most are married couples, with or without children.
 Median age is 37 years, and more than 40% of these householders are 55 or older.
 Is not ethnically diverse, more than 87% of the segment are white.
Socioeconomically the median income for Southern Satellites residents is $37,000. Their
neighborhoods are usually dominated by one or two major manufacturing and/or construction industry
that provide much of area employment. Almost 1/3rd do not have a high school diploma a figure well
above the national average of 1/5th.
Residentially most are single family dwellings and
mobile homes, 2/3rds are single family homes and
1/3rd are mobile homes. Most of these homes are
newer with over 66% being built after 1970.
Median home value is $79,000 and most own their
own homes rather than rent. They tend to move less
often than the national average.
Preferences – Southern Satellite residents enjoy country living and:
 Fishing and hunting are two favorite leisure activities,
 They spend money on magazines, clothes and other gear related to these interests,
 Their taste in music is predominantly country,
 Their rural setting makes satellite dishes common and in many cases necessary when cable is
not available,
 These households include pets especially dogs,
 Home activities do not include extensive home improvement projects but they do invest in
their property, many have gardens,
 They are most likely to own riding lawn mowers, garden tractors and tillers.
 Trucks are more common than sedans,
 Prefer domestic car manufacturers to foreign ones.
 Due to rural setting most households have two or more vehicles to meet transportation needs.
Politically they consider themselves conservative, newspaper and magazine readership is low, but they
do listen to radio.
They enjoy watching television; their favorite channels include Country Music Television and ESPN.
Favorite programming includes hunting/fishing show and NASCAR racing.
Home personal computers and accessing the Internet have not made significant inroads in this market
to the same degree as other segments.

5. The same type of information is available for the other six dominant segment groups in this target
market area. These include:
Segment 37 – Prairie Living, Segment 43 The Elders, Segment 46 Rooted Rural, Segment 49
Senior Sun Seekers, Segment 50 Heartland Communities and Segment 56 Rural Bypasses.
ESRI Community Tapestry report provides the
same detailed information about these six
segments.
Other Uses for Segmentation Data:
By understanding behavior, socio‐economic,
demographic commonalities in each of the seven  Look for best location for new
groups it becomes a very easy task for a retailer or store
service business in that area to determine which of  Evaluate success of exiting store
these segments would most likely value their locations
 Select merchandise or service mix
products or services.
that best suits customer
By understanding their behavior you can determine preferences
how to develop specific marketing messages that  Direct advertising and marketing
messages with the RIGHT message
will be the most affective in reaching these
to the RIGHT audience
groups.
 Target direct mail or other
Additionally by overlaying a similar map of area promotions to the most
income levels or population density it is a very easy responsive audience
prospect to determine which areas should be
targeted with your particular marketing message.
This powerful information is will allow any small business owner to access easy to apply
information needed to understand its consumers, to supply them with the right products
and services, to reach them more effectively by their preferred media, AND to know
how to approach them to develop a common bond that will help establish that long
term relationship so vital to business success.
This information is easy for ANY small business to obtain at virtually no cost. Through
the Arkansas State University Small Business and Technology Development Center any business owner
in our 15 County area of Northeast & North‐Central Arkansas can access this type of information at no
charge through our consulting assistance programs.
If you would like more information about how the Arkansas State University Small Business and
Technology Development Center consultants can help you target your market, call (870) 972‐3517, e‐
mail us at asusbtdc@astate.edu or read more at the ASU Small Business Blog.
Helping Small Businesses Grow from the Delta to the Ozarks.