Segmentation is often an area, causing a lot of confusion or even unwelcome conflicts for product managers. In some organizations “Market segmentation” is seen as a pure marketing tool and would be the responsibility of the marketing department.
- Defining the marketWhen working with product strategies and Roadmapping it is important to have a wide definition of your market. It is generally not about your product, but the NEED of the customers. Now, we are talking about the “end user” and not necessarily of your first step in a distribution channel. You shouldn’t be in the “heat exchange market” but rather the “market by transferring heat from one media to another”
- Defining segmentsThere are numerous books and articles on defining segments from a marketing perspective. Segments can be based on industry (telecom, medtech), geography (EMEA, US), business size (small/large enterprises) – in fact any kind of sorting making sense to your business.
- Selecting your Target marketOut of all defined segments, one (or a few) should be prioritized and selected for any given product development initiative. Portfolio management and requirements prioritization methods can be utilized in this step. Tools like Personas, The Value canvas, Value proposition design – can be implemented when defining your product offering in the Roadmap. We want to achieve a good fit to our selected target market!
- Development of the solutionThe product is designed with the target market in mind
- Launch to the target marketTypically the product is first launched to the selected target market.
- Launch to additional segmentsYour segmentation model can be further refined – additional segments having similar needs can be identified. You can reuse the already developed product – but you might need new channels and marketing messages to reach the needs of the other segment.
Segmentation is a very powerful tool not to be confined to marketing domains.On the contrary – segmentation is a necessary preparation step in order to develop coherent Roadmaps. Where should we focus our product development and launch resources?In later stages – additional segmentation differentiation can be made when we want to address additional markets with our existing product!Download the extended Product Management FrameworkDownload
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