Course : Z1662 – Entrepreneurship Business Project I

Year : 2016

Market Segment – Persona

Session 1
F2F
 Learning Objectives

LO 1: Recognize the opportunity, idea and innovation for

entrepreneurial project.
 Sub Topics

1. Customer Segment in Civil Engineering Field

2. Market Segmentation
3. Customer Insight
 Customer Segment
in Civil Engineering Field
 Customer Segment

Customers comprise the heart of any business model.

Without (profitable) customers, no company can survive for long.
In order to better satisfy customers, a company may group them into
distinct segments with common needs, common behaviors,
or other attributes.

The Customer Segments Building Block

Defines the different groups of people or
organizations an enterprise aims to reach
and serve
 Customer Segment (Cont’d)

A business model may define one or several large or small

Customer Segments.

An organization must make a conscious decision about which segments

to serve and which segments to ignore. Once this decision is made, a
business model can be carefully designed around a strong understanding
of specifi c customer needs.

Customer groups represent separate segments if:

 Their needs require and justify a distinct offer
 They are reached through different Distribution Channels
 They require different types of relationships
 They have substantially di!erent profi tabilities
 They are willing to pay for different aspects of the offer
 Types of Customer Segment
Mass market
Business models focused on mass markets don’t
distinguish between different Customer
Segments.
The Value Propositions, Distribution Channels,
and Customer Relationships all focus on one large
group of customers with broadly similar needs
and problems. This type of business model is
often found in the consumer electronics sector.
Niche market
Business models targeting niche markets cater to
specific, specialized Customer Segments. The
Value Propositions, Distribution Channels, and
Customer Relationships are all tailored to the
specific requirements of a niche market. Such
business models are often found in supplier-buyer
relationships. For example, many car part
manufacturers depend heavily on purchases from
major automobile manufacturers.
Segmented
Some business models distinguish between
market segments with slightly different needs and
problems. The retail arm of a bank like Credit
Suisse, for example, may distinguish between a
large group of customers, each possessing assets
of up to U.S. $100,000, and a smaller group of
affluent clients, each of whose net worth exceeds
U.S. $500,000. Both segments have similar but
varying needs and problems. This has implications
for the other building blocks of Credit Suisse’s
business model, such as the Value Proposition,
Distribution Channels, Customer Relationships,
and Revenue streams. Consider Micro Precision
Systems, which specializes in providing
outsourced micromechanical design and
manufacturing solutions. It serves three different
Customer Segments—the watch industry, the
medical industry, and the industrial automation
sector—and offers each slightly different Value
Propositions.
 Types of Customer Segment
Diversified
An organization with a diversified customer
business model serves two unrelated Customer
Segments with very different needs and problems.
For example, in 2006 Amazon.com decided to
diversify its retail business by selling “cloud
computing” services: online storage space and on-
demand server usage. Thus it started catering to a
totally different Customer Segment—Web
companies—with a totally different Value
Proposition. The strategic rationale behind this
diversification can be found in Amazon.com’s
powerful IT infrastructure, which can be shared by
its retail sales operations and the new cloud
computing service unit.
Multi-sided platforms (or multi-sided
markets)
Some organizations serve two or more
interdependent Customer Segments. A credit
card company, for example, needs a large base
of credit card holders and a large base of
merchants who accept those credit cards.
Similarly, an enterprise offering a free
newspaper needs a large reader base to attract
advertisers.
On the other hand, it also needs advertisers to
finance production and distribution. Both
segments are required to make the business
model work (read more about multi-sided
platforms on p. 76).
Market Segmentation
 Market Segmentation
Step 1: Brainstorming
Brainstorming wide array of
market opportunities. No matter
how crazy the idea might be.
This would prevent you of
thinking that you have already
had a specific market and
specific application in mind.
Put those ideas in order, find
some similarities between those
ideas, and put the similar ideas
in group.
(Step by step)
Step 2: Narrow Things Down
Take the 6-12 top ideas that consist of potential end users and application of
your idea. To narrow things down, you should be able to answer these
questions:
- Is the target customer well-funded?
- Is the target customer readily accessible to your task force.
- Do the have reason to buy?
- Can you deliver a complete product today?
- Is there any strong competitors blocking the way?
- If you could win this segment, could you use it for your benefit to enter
additional segment?
- Is the market consisten with values, passions and goals (of the founders)?

Step 3: Do Primary Market Research

Go talk to your customers. The direct talk will help you to get the better
sense of which market opportunity is best.

Warning:
If you could find some or even only one market research report on the
market with all information that you need, you might be too late.
Customer Insight
 YOU (Yourself)
Organization-centric Business Model Design

The Questions would be:

 What can we sell to customers?
We were the one who decided what to sell.

 How can we reach customers most efficiently

We decided the method that we were going to use to
get in touch with the customers.
We PU
as the T Custome
 What relationship do we need to establish with PAS rs
customers? instea SIVE party
them d of taking ,
We decided what kind of relationship that we as the
o ur b part o
wanted to have with the customers. u s in e f
ss!
 How Can we make Money from our Customers?
We decided how customers would give us the benefits
 Them!
Customer-centric Business Model Design

The questions would be:

 What job(s) do(es) our customer need to get done and
how we can help?
 What are our customer’s aspirations and how can we
help them live up to them? Al l d e
c is i
 How do our customer prefer to be addressed? are go ons that w
 How do we, as an entreprise, best fit into their routines? wo ing to mak e
uld be e
 What relationship do our customers expect made
based
to establish with them? CUSTO on
M
OPINI ERS’
 For what value(s) are customers
truly willing to pay? ON!
 How Can We Understand
the Customers’ Perspective?

The
Empathy
Map
 How to Use the Empathy Map?
1. Brainstorm to come up with all the possible Customer Segments that you might want to serve using your business model.
2. Choose three promising candidates, and select one for your first profiling exercise.
3. Start by giving this customer a name and some demographic characteristics, such as income, marital status, and so forth.
4. Referring to the diagram on the opposite page, use a flipchart or whiteboard to build a profile for your newly-named
customer by asking and answering the following six questions:

5. wh
a
1. wha
t What t is the cu
describ does she see ally a st
frustr re her big omer’s pa
in her
e wha
t
?
h a t d oes she re ation gest in?
Enviro the custome 3. w
d feel?
What
obsta
s?
- Wha
td
nment
.
r sees think an ally important her a cles s
- Who oes it look li re
What is ich she might
n t
need d what sh and betw
su ke
- Who rrounds her ? to h e r (w h
Whic
s to a
chiev
e wa e
nts o en
are he
r frien
? p ublicly)? h e ? r
- Wha
tt ds? not say er emotions. fear t risks migh
is she ypes of offer h might aking
expose s Imagine es her? What ?
t she
d o v
oppos
ed to a to daily (as What m p at night?
ll mark ru s
What
pr et keep he ing her dream
encou oblems does offers)? Try des c rib
.
nter? she irations
and asp 4. wh
a
say a t does she the
custo
nd d o
? ima ha t does
6. w ain? ant
mer g he truly w
2. what does she hear? m gi
migh er might ne what t u sto
describe how the environment t beh say, o he c s
What ave rh does e?
infuences the customer is her in public ow she What to achiev sure
What attu e d a
What do her friends say? c
Pay p ould she de? or ne es she me
d o
Her spouse? a be
to po rticular at telling o How ? i es
Who really influences her, and te e thers suc c e ss st rateg e
betw ntial confl ntion ?
of som
e v
e achie
how? Which media Channels migh
en w hat a
ic t s Think ht use to
t c ig
are infl uential? may say and w ustomer she m ls.
truly h oa
. think at she her g
or fee
l.
 References
Aulet, Bill (2013). Disciplined Entrepreneurship: 24 Steps to Successful
Startup. John Wiley & Sons, New Jersey. ISBN: 978-1-118-69228-8

Osterwalder, Alexander; Pigneyr, Yves (2010). Business Model

Generation. John Wiley & Sons, New Jersey. ISBN: 978-0470-87641-1