CUSTOMER &

MARKET
PATRICK RAZAFINDRAVONJY

NOVEMBER, 2024
SUMMARY
1 MARKET TYPES

2 MARKET SEGMENTATION

3 NICHE MARKET

4 MARKET SIZE ESTIMATION

5 CUSTOMER PERSONA

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MODULE GOALS
Learn the different types of markets and understand which strategies work
best in each one.
Understand how to divide a market into segments and define a specific
target audience, making it easier to design products and marketing
campaigns that resonate.
Learn how to estimate the size of a market to gauge its potential and create
customer personas to better understand and address customers' needs,
preferences, and behaviors.

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MARKET
TYPES

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4 TYPES OF MARKET
New market: Existing market:

A completely fresh market where A well-defined market with

an innovative product or service established competitors and
meets an unmet need. There is customer preferences. To succeed,
little to no competition, but new entrants need a compelling
customer needs are uncertain, value proposition to differentiate
requiring extensive customer from existing players.
research.

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4 TYPES OF MARKET
Resegmented market Clone market

A niche within an existing market A market created by replicating a

that targets specific customer needs successful business model from one
unmet by current offerings. This region or culture in a new area.
approach allows businesses to serve While this reduces some risk,
underserved segments with tailored adaptation to local preferences is
products. essential to avoid direct copying.

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MARKET
SEGMENTATION

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MARKET SEGMENTATION
Demographic segmentation : This is the most basic and common type. It
divides the market based on easily measurable characteristics of the
population

Age: specific age groups (Gen Z, millennials, baby boomers).

Gender: products or services specifically for men or women.
Income: high-income earners, middle-income groups, or lower-income
earners.
Education: specific levels of education (college graduates, ...).
Occupation: professionals, blue-collar workers, or specific industries.

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MARKET SEGMENTATION
Geographic segmentation : This type divides the market based on location

Country: selling products internationally or focusing on specific

countries.
Region: customers within a specific state, province, or region.
City: specific city or metropolitan area.
Climate: products based on weather conditions.

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MARKET SEGMENTATION
Psychographic segmentation: This delves deeper into consumer motivations
and lifestyles

Lifestyle: specific interests, hobbies, and activities (fitness enthusiasts,

gamers, or outdoor adventurers, ...).
Personality traits: personality types (extroverted, introverted,
analytical, creative, ...).
Values: consumers who hold certain values (sustainability, social
responsibility, ethical production, ...).
Attitudes: consumers based on their beliefs and opinions (health-
conscious, tech-savvy, environmentally aware, ...).
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MARKET SEGMENTATION
Behavioral segmentation: This focuses on how customers interact with
products and services

Usage rate: customers who use a product frequently or infrequently.

Benefits sought: consumers looking for specific benefits from a product or
service.
Loyalty status: loyal customers, infrequent customers, or those who
have recently switched brands.
Occasion: products for specific occasions (holidays, special events, or
everyday user).

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NICHE
MARKET

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NICHE MARKET
A niche market Specific needs: A niche market serves people
is a small, with unique needs, like gluten-free foods for
focused part of people with gluten sensitivity.
a larger market.
Small audience: It has a smaller, well-defined
It targets
customers with customer base, making it easier to understand
specific needs and reach them.
that aren’t fully Less competition: There are often fewer
met by general competitors because it’s a specialized market,
products. which allows small businesses to stand out.
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NICHE MARKET
Unique value: Niche products offer Challenges:
something unique, meeting exactly
customers’needs. Niche markets have
Higher prices: Since niche products are fewer customers, so the
specialized, customers are usually willing business can be more
to pay more. affected by changes
Loyal customers: People who buy niche in trends or
products are often very loyal, returning to preferences.
buy again.
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MARKET SIZE
ESTIMATION

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MARKET SIZE ESTIMATION

Total Addressable Market (TAM)

Total revenue opportunity available if a
product or service achieved 100% market share.

Serviceable Addressable Market (SAM)

Portion of TAM that a company’s product or
service could realistically serve based on its
capabilities.
Serviceable Obtainable Market (SOM)
Segment of SAM that a company expects to
capture, representing its target market share.
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MARKET SIZE ESTIMATION

Top-Down approach Key Features:

Starting point: Begins with the total addressable
It begins with a broad market (TAM) and breaks it down into smaller
overview of the entire segments, such as the serviceable available market
market and narrows down (SAM) and serviceable obtainable market (SOM)
to specific segments. This based on specific criteria like geography or customer
method typically uses demographics
existing data from industry Data sources: Relies heavily on secondary data
reports, market research, and sources, including reports from consulting firms and
macroeconomic indicators to market research companies.
derive estimates.
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MARKET SIZE ESTIMATION
Process: Advantages:
It involves taking Speed and ease: This method is generally quicker and easier to
a large market execute since it utilizes readily available data
figure, such as total Broad insights: It provides a macro view of the market,
sales in an helping businesses identify potential opportunities across
industry, and adjacent markets
applying Disadvantages:
assumptions or Less precision: The reliance on broad estimates can lead to
percentages to inaccuracies, especially if the assumptions made are not well-
estimate the size of founded
the target segment. Potential overestimation: Often results in optimistic estimates
that may not reflect realistic market conditions or competition
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MARKET SIZE ESTIMATION

Bottom-Up approach Key Features:

Starting point: Begins with detailed information
The bottom-up approach about potential customers, such as their number and
focuses on building an average revenue per user (ARPU).
estimate from individual Data sources: This method often requires primary
data points, typically research, including surveys and interviews to gather
starting with specific accurate data about customer preferences and
customer segments or behaviors
product metrics.

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MARKET SIZE ESTIMATION
Advantages:
Higher accuracy: Generally considered more robust because it is
Process: based on real customer data rather than broad estimates
3
The calculation
Detailed insights: Provides a granular view of the market that
involves
can help in understanding customer needs and behaviors more
summing up
effectively
known data
Disadvantages:
points.
Time-Consuming: This approach can be more labor-intensive
and costly due to the need for extensive primary research.
Complexity: Requires detailed knowledge of the target market
and may involve multiple assumptions that can complicate the
estimation process. 18
CUSTOMER
PERSONA

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CUSTOMER PERSONA
A customer persona Importance
is a semi-fictional Targeted marketing strategies: By understanding who your
representation of ideal customers are, you can create more personalized
your ideal customer marketing campaigns that speak directly to their needs and
based on real data preferences. This increases the likelihood of engagement and
and informed conversion.
assumptions about Improved product development: Personas provide insights
their characteristics, into what features or services are most valuable to
behaviors, customers, guiding product development efforts.
motivations, and Enhanced customer experience: Knowing your customers
goals. allows you to tailor interactions across various channels,
leading to a more cohesive and satisfying experience.
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CUSTOMER PERSONA
How to create a customer persona
Research existing customers: Conduct interviews and surveys to gather insights
about current customers.
Identify patterns: Look for common characteristics among customers to group them
into distinct personas.
Define key attributes: Create detailed profiles that include demographics,
psychographics, behaviors, goals, challenges, and journey insights.
Validate your personas: Test these personas against real-world data and adjust
them based on feedbacks.
Update regularly: As markets evolve and customer preferences change, regularly
revisit and update your personas to ensure they remain relevant.

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ASSIGNMENTS

Estimate your market size and precise the method you

used.
Create your customer persona.
Validate your customer persona with your potential
customers.
Please create a Google Doc file in which you are going to put all the assignments during the
program, and set the email : [email protected] as a collaborator who can
“Comment” the document.

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