How To Do Strategic Segmentation – Step 3: Identify Unmet Needs

Strategic segmentation is a process for developing strategies that appealing to specific customer groups, increasing you effectiveness in serving that group in a way that is both profitable and sustainable. The first two steps in the strategic segmentation process are to identify key audience characteristics that define subgroups and to understand the core motivations that influence how those subgroups will engage with your organization.

The next step in the strategic segmentation process is to identify any unmet needs that represent an opportunity (or a threat) for you to serve those customers. Unmet needs are important because they are the source of discontent (whether known or not) that will cause someone to want to change. If that person is already a customer, then unmet needs can be a threat because it may be their relationship with you that they change.

How To Do Strategic Segmentation – Step 2: Understand Customer Motivations

We’ve covered how strategic segmentation can help you develop effective strategies for appealing to specific customer groups in a way that is both profitable and sustainable. At this point you’ve identified key audience characteristics that allow you to both classify subgroups of your audience and inform ways that you can relate to those groups with your products and services.

The next step in the strategic segmentation process is to understand the different motivations that lie behind their decisions and behaviors.

Understanding Customer Motivations

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Strategy Principles – Picking The Right Tool

The other day I was cooking a quick dinner for my family. We have two small children (a one year old and a two year old), so “quick” is critical to our dinner preparation. I needed to cut up some chicken so I reached over to our knife block to grab the necessary tool. Instead of grabbing the 7″ Santoku or the 8″ chef’s knife, I grabbed a steak knife. As I was doing so, the following conversation occurred in my head:

Me: “That’s not the best knife for cutting chicken.” Also me: “We’re using the steak knife.” Me: “Bad idea.” Also me: “We’re using the steak knife.” *Kid yells and our attention refocuses on getting dinner ready.

Strategy Principles – Looking From Different Angles

I was reminded of this by a post I read on Abraham Piper’s blog. Earlier this year, Target introduced a new look for it’s private label, commodity product lines. The brand is called “up&up” and has received a lot of positive attention from the design world.

From a consumer’s perspective, I personally welcomed the change as the new brand distracts me from the reality that we shop at Target because we do not have excess discretionary income and they sell mostly quality products. The new brand really emphasizes the quality of Target’s products when compared to other low-cost competitors (like Walmart or ...