Market Segmentation and Market Sizing
Most new product launches involves two basic questions:
» How big is the market
» Who are its target segments?
We regard answering these questions as a core area of expertise. We take a practical business oriented approach to answering the questions – and that means delivering market size in terms of number of users or revenues, rather than just a percent. And, to arrive at our answers, we utilize techniques from statistical cluster analysis to our own spreadsheet based algorithms.
Using these techniques, we have successfully sized the markets for many new products – and have identified new targets for other existing products. We have even been able to estimate “cannibalization” effects of old media revenue by their digital counterparts – in some cases, forcing a change in company strategy. We have segmented the market for online games, online investors, online music buyers, magazine subscribers, TV crime show viewers – among others.
Segmentations are only as good as the research designs that generate them and the thinking used to identify the segments. Whether we use statistical models of other classifications, we deliver segments that companies can use in their product development and marketing plans...
Our analyses are not black-box mystery models, but clearly documented spreadsheet (or, in the case of segmentation, statistical) revenue and market size models that can be replicated by others in your company. All of our market estimates are actually matched to real market data whenever that is possible—and all of our predictions are also checked against real performance data.
Strategies and companies that have benefited from our work include:
- Our audience segmentation led to increased ratings and improved demographics for a cable network
- We have accurately predicting the sizing of newsstand audiences for several new magazines, allowing the publisher to price ad rates and manage newsstand inventory
- A pricing and revenue loss (“cannibalization”) study led a major website to charge for some of its content
