This Slideshare presentation is a partial preview of the full business document. To view and download the full document, please go here: http://flevy.com/browse/business-document/market-segmentation-and-analysis-tool-315 From a high-level, the goal of a marketing strategy is to identify a target market and develop a marketing mix that will appeal to those potential customers. Decisions regarding the ideal marketing mix can be organized in terms of Price, Promotion, Product, and Price. However, the goal is not to just come up with a particular strategy, but rather to focus on providing value to your key market segments. With limited resources, you can't pursue all possible market opportunities. This Market Segmentation and Analysis Tool helps you select the markets that represent the best opportunity for your organization. This tool is used to to analyze market segment sizes and develop Customer Profiles based on Demographic, Psychographic, and Environmental criterion. Key functionality include: *Suggests segmentation criteria *Provides segment sizing example to follow *Perform weighted segment analysis *Review segment rankings *Charts prioritized segments

1. Market Segmentation & Analysis Tool
Instructions
1. Use the "Segmenters" tab to generate ideas and help you narrow down the 2 major segmentation criteria that will be used for the remainder of this exercise.
2. View the examples in the "Sizing (Example)" and "Segments (Example)" tabs below to see a real-world sample of how this process works. Delete these tabs when you finish
this analysis.
3. In the "Sizes (Actual)" tab, enter the major segmentation criteria into the matrix (green area). Further refine those segments with minor segmentation criteria (beige area).
4. Enter the market research data you have collected into the matrix to generate micro-segment sizes and calculate the Total Addressable Market for your product.
5. In the "Segments (Actual)" tab, define your key market segments by merging the cells. Total up the market segment size and add a description like in the example.
6. Once you have selected the key market segments to target, prioritize them using the exercise in the "Weightings", "Segment Analysis", "Rankings" and "Segment Map" tabs.
7. In the "Weightings" tab, weight the importance for each prioritization criteria. Be sure that your total weight equals no more or less than 100%.
8. We have set up the evaluation criteria based on Competitiveness, Market Opportunity, and Attractiveness perspectives. Feel free to customize as you see fit.
9. In the "Segment Analysis" tab, rank each market segment (Green, Amber, Red cells) on a scale of 1-10 based on the criteria.
10. In the "Rankings" tab, sort the results to identify the segments that are most attractive to your business presently.
11. View the automatically generated "Segment Map" and "Chart" tabs which provide visual representations of the data from the segment analysis.
12. Identify which segments to target and which to ignore and communicate your findings internally with key stakeholders.

2. Market Segmentation & Analysis Tool
Demographic (who they are)
B2B
B2C
Psychographic (how they think)
B2B
B2C
Behavioural (what they do)
B2B
Annual Revenue
Age
Resistance to Change
Brand Preferences
Website Visits
# Employees
Income
Market Focused
Price Sensitivity
Industry
Marital Status
Open-Minded/Rigid
Conservative/Liberal
# Locations
Education
Decision Process
Years in Business
Family Size
Markets Served
B2C
Purchase History
Environment (where they are)
B2B
B2C
Technology
Country of Residence
Response to Marketing Where they shop
Purchasing Power
Political Climate
Purchasing Methods
Store preferences
Management Style
Currency
Enviro-Friendly
Memberships
Memberships
Purchasing Process
Payment Methods
Early Adopter
Hobbies
Internet Usage
Internet Usage
Purchasing Power
Shipping & Receiving
Gender
Growth vs. Static
Lifestyle
Collateral Consumed
Impulsiveness
Business Culture
Languages Spoken
Products/Service
Geographic Location
Tech Sophistication
Information Sources
Job Title
Social Circles
Professionalism
Service Preference
Level of Experience
Occupation
Require Referrals
Buy based on trends
Awareness of options
Spontaneous
Risk Aversion
Influenced by peers
Loyalty
Relationships

3. Company Size (Revenue)
United States
Australia
International Markets
Canada
100M+ Revenue
5-100M Revenue
0-5M Revenue
2,496
184,953
Total Addressable Market (TAM)
73,895
2,429,133
29,054
1,495
1,204,493
78,395
784,960
69,392
For this example, we have selected a fictional company that sells helpdesk
software and is looking to target organizations in English-speaking countries
(USA, Canada and Australia) and do further segmentation based on the size
of company (annual revenue). This is designed to give you a sample of how
you might want to consider setting up your market sizing and segmentation.

4. Company Size (Revenue)
100M+ Revenue
5-100M Revenue
0-5M Revenue
Market Segment Sizes
Canada
Small Business
928,247 small businesses in
USA, Canada & Australia
North America
Corporate
1,420,996 mid-sized and large
corporations in USA & Canada
United States
North America Corporate
Australia
International Markets
Segment
Small Business
Australia Corporate
Australia
Corporate
79,890 mid-sized and large
corporations in Australia

5. Minor Criteria 3
Minor Criteria 3
Major Segmentation Criteria 2
Minor Criteria 2
-
-
-
Total Addressable Market (TAM)
-
Minor Criteria 1
Minor Criteria 1
Minor Criteria 2
Major Segmentation Criteria 1
0
-
-
-
-
-
Determine the major and minor segmentation criteria you will be using and
plug them into the green and beige cells on the matrix on the left side of this
worksheet. Conduct market research to identify how many target
organizations (B2B) or consumers (B2C) fit your segmentation criteria. Plug
the numbers from your research into the matrix. This will calculate an overall
number for the "Total Addressable Market" for your product. You might want
to use information resources such as Hoovers, Dun & Bradstreet, Jigsaw, or
ZoomInfo to gather data.

6. Minor Criteria 3
Major Segmentation Criteria 2
Minor Criteria 3
-
-
-
Segment 1
Minor Criteria 2
Segment
Minor Criteria 2
-
-
-
Segment 2
Minor Criteria 1
Major Segmentation Criteria 1
Minor Criteria 1
-
-
-
Segment 3
Market Segment Sizes

7. Market Segmentation & Analysis Tool
Weighting Scale
Competitiveness
Market Opportunity
Attractiveness
Ability to
Differentiate
Competitive
Intensity
Barriers to
Entry
Market Size
Growth Rate
Profitability
Strategic &
Technical Fit
Capabilities
Maturity &
Timing
15%
15%
20%
10%
15%
5%
10%
5%
5%
Ranking Criteria & Definitions:
Ability to Differentiate - is there a specific competitive advantage that you can provide to this market?
Competitive Intensity - are there few competitors actively engaged in this market segment? Are they weak?
Barriers to Entry - are there any major barriers to entry (technology, patents, distribution, etc)?
Market Size - how large is the total addressable market?
Growth Rate - what is the anticipated growth rate for this segment?
Profitability - are profit margins attractive?
Strategic & Technical Fit - how aligned is this market opportunity with our strategic direction?
Capabilities - do you have the technical capabilities to effectively compete in this market?
Maturity & Timing - how mature is this market? Is now the right time to enter?
Total
100%

8. Market Segmentation & Analysis Tool
Competitiveness
Market Opportunity
Attractiveness
Ability to
Differentiate
Competitive
Intensity
Barriers to
Entry
15%
15%
20%
10%
15%
5%
10%
5%
5%
Australia Corporate
8
8
7
8
9
7
5
4
7
North America Corporate
4
5
8
10
6
8
7
8
6
Small Business
9
6
6
9
8
6
3
5
2
Sample Segment
3
1
4
4
7
5
6
3
8
Undesirable Segment
2
2
2
3
3
3
2
2
3
Market Segments
Weighting
Market Size Growth Rate
Profitability
Strategic &
Capabilities
Technical Fit
Maturity &
Timing

9. Market Segmentation & Analysis Tool
Note: Sort by selecting all cells then click "Data"in the navigation menu and "Sort". You can sort by Segment Score (Largest to Smallest).
Market Segments
Segment Score
Competitiveness
Market Opportunity
Attractiveness
Australia Corporate
7.4
3.8
2.5
1.1
North America Corporate
6.7
3.0
2.3
1.4
Small Business
6.5
3.5
2.4
0.7
Sample Segment
4.3
1.4
1.7
1.2
Undesirable Segment
2.4
1.0
0.9
0.5

10. Highly Competitive
Top Priority
High
North America Corporate
Sample Segment
Attractiveness
Australia Corporate
Bubble Size = Market Opportunity
Small Business
Undesirable Segment
Low
Segments to Ignore
Low
Low Competition
Competitiveness
High

11. Ability to Differentiate
10
Market Segment Rankings Chart
9
Maturity & Timing
8
Competitive Intensity
7
Australia Corporate
6
5
4
North America Corporate
3
Capabilities
Barriers to Entry
2
Small Business
1
Sample Segment
Strategic & Technical Fit
Market Size
Undesirable Segment
Profitability
Growth Rate