Evaluation of Product (Market) Segments

A product/market segments evaluation examines the development of individual market segments within the overall market, in terms of: size, growth, value, importance, etc. as changes in the size and relative importance of the segments must be assessed in conjunction with the market. It further examines the company’s product/market portfolio with respect to the different segments.

Methodology

1. Assess the company’s product offering. Study the company’s and its competitors’ product offerings and identify major areas of differentiation.
2. Evaluate product/market alignment. Match product offerings to the market segments identified from product/market segmentation analysis. Determine whether the company’s offerings are appropriate to serve their targeted segments.
3. Assess segment importance. Assess size of individual segments within the overall market, evaluate the share that each company possesses within each individual segment and the overall market. Determine how individual segment sizes are changing. Assess the relative importance of each segment to the company.

Notes

• Studying trends affecting the market segmentation can be critical in identifying segment attractiveness
• Relative importance of a segment is necessary for strategic planning and resource allocation as investment and growth in a stagnant or shrinking segment may limit the growth of the company

Strengths

• Reveals attractive segments
• Provides data to assess matching products to customers
• Helps prioritize product lines
• Identifies gaps in product offerings

Weaknesses

• Does not look at miscellaneous factors affecting segment importance such as branding, reputation, etc.