This PPT slide, part of the 47-slide Customer Segmentation PowerPoint presentation, outlines a framework for selecting target segments in customer segmentation. It emphasizes 2 main criteria: attractiveness and the company's ability to serve these segments in a differentiated manner.

Attractiveness is assessed through 2 key components: revenue potential and cost to serve. Revenue potential includes factors like size and growth potential of the segment. This indicates that larger and rapidly growing segments may offer more opportunities for profit. Cost to serve evaluates elements such as buyer power, product requirements, and price sensitivity. Understanding these factors helps in determining how much it will cost to effectively serve a segment, which is crucial for maintaining profitability.

The second criterion, ability to serve in a differentiated way, is broken down into the client’s core capabilities compared to competitors and external factors. The client’s capabilities involve assessing strategic objectives and the ability to leverage technology and costs effectively. This suggests that a company must understand its unique strengths and how they can be applied to meet the needs of the target segment better than competitors.

External factors include legal restrictions and regulatory requirements, which can significantly impact the feasibility of targeting certain segments. These considerations are essential for ensuring compliance and avoiding potential pitfalls.

Overall, this slide provides a structured approach to segment selection, highlighting the importance of aligning a company's strengths with market opportunities while considering external constraints. This framework can guide strategic decision-making for executives looking to optimize their market focus.

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Customer Segmentation Compliance