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Define your Customer Segments

Innovation and Business Model


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Unit Video

Unit Summary

The 3 Kinds of customer segments if you are a start-up:
  • Mass market
  • Niche Market
  • Multi-Sided Market

Build Your Action Plan

In this video we will learn what are some ways in which you can identify the customers or users that you aim to serve or reach in your business.
Customer segments have something in common with each other allowing you to reach them more easily by knowing what their interests are, where you can reach them and what do they need.
Here are 3 ways that you can define your customer segments if you are a start-up:
  1. Mass market includes a broad range of people that could be interested in your offerings. This is quite common in consumer products, but reaching that mass market is very costly for start-ups. A lot of consumer goods like chocolates, soap, and milk follow such a model as well as others like WhatsApp
  2. Niche Market includes a more specific group of people that come together because of their age, location, and interests. It is easier for a start-up to reach such a customer segment since it’s easier to grab their attention through your knowledge of their interests. Health products, organic, specific apps could follow this model
  3. Multi-Sided Market is specific to companies that have users of the products or service who could be using it for free and clients who have an interest in reaching that set of users. Advertising businesses use this model where advertisers are the clients can reach readers who are the users
All through the development of your business it is crucial that you and your team are very clear on the market segment that you are trying to reach as this would guide many other decisions that you need to take.

Spend a lot of time talking to customers face-to-face. You’d be amazed how many companies don’t listen to their customers. Ross Perot