A guide to developing a product segmentation strategy

Product segmentation is a strategic approach that involves dividing a product offering into smaller, targeted groups to address distinct market segments, thus helping maintain market leadership amidst growing and diverse customer bases. This strategy allows companies to tailor their value propositions and marketing efforts to specific audiences, avoiding the pitfalls of creating a generic product that fails to satisfy any particular group. For instance, Samsung's division of its mobile offerings into distinct lines caters to different consumer needs, ensuring each product resonates with its target audience. While segmentation can enhance user experience, positioning, and customer satisfaction, it comes with increased costs related to development, marketing, and operations. Implementing product segmentation requires thorough market research to identify impactful criteria for segmentation, prioritizing segments based on size, familiarity, satisfaction, and willingness to pay, and creating detailed user personas to guide product development. Though costly, product segmentation is often necessary for companies aiming to remain competitive as their audience expands.