Accidental market segmentation
I’ve been thinking more critically about how Ubernote fits into the online note-taking market recently as a result of our LaunchBox application. Before you can start thinking about how your product fits into a market, you have to think about how that market is defined, and how it is segmented. From a pure business standpoint, a market is defined purely by customer need. The best definition that I found is something like this:
A market is the set of all actual and potential buyers of a product or service. source
This definition is so broad that it is only useful as a starting point. In order to figure out how we can position our product, we need to segment this market. Common variables used for market segmentation include demographic variables such as age and gender, geographic variables such as country or region, psychographic variables such as values and attitudes, and so on. source:
The problem is, the typical variables used to segment a market don’t seem particularly useful to me. Looking at Ubernote’s usage statistics I can see that we already have users from around the world, and although it’s possible that many of our users fit specific demographic profiles, I wouldn’t think that Ubernote’s appeal would be limited to any particular demographic. For advertising campaigns, demographic information could be useful, but I doubt it is good to segment our target market based on these variables.
Another question in my mind is that our actual market is limited by the platforms that we support. This is way outside of the definition of the business definition of a market and is not touched on by the Wikipedia article. Is this an example of `accidental’ market segmentation? Surely a business that is after a certain market segment would want to offer a solution that would appeal to all of the potential customers in that market. Or, maybe not, in the case of serving a market niche like Mac users or Linux users. Is defining a market segment this way legitimate in a business sense? Or only in a practical sense for business execution? Would defining your market segment as `word smashing for Linux users’ be legitimate from a pure business standpoint?
I expected to clarify my thoughts on this, but I ended up with more questions than answers.