How to Define a Market Segmentation Map
By Geoff Anderson
The Company maintained an aging instrumentation product family with most revenues generated from mature, slow growth markets. There were two primary markets that were well exploited, and many sub markets that were one hit wonders. Management was anxious to define worthwhile new product development projects, but the way we were looking at, and tracking, sales was so fragmented that we could not see a broad market opportunity. We needed to create a market segment model that helped us identify coherent sets of needs to fuel growth and competitive advantage.
Many scientific instruments are sold as one or a few unit transactions across a broad market of customers, each with very specific measurement needs. The Order Entry Checklist that sales filled out was both complex and granular in some respects, and so broad as to be useless in others. Our sales people usually just resorted to checking the lowest common broad category available, like “materials science.” Also, the business was comprised of two distinct product families as the result of a merger. One product line was sold into scientific research, while the other was sold into the quality departments of production operations – these two business units did not see the synergy or cross-selling opportunities in their technologies.