Market Segmentation & Analysis Tool

Instructions
1. Use the "Segmenters" tab to generate ideas and help you narrow down the 2 major segmentation criteria that will be used for the remainder of this
exercise.
2. View the examples in the "Sizing (Example)" and "Segments (Example)" tabs below to see a real-world sample of how this process works. Delete these
tabs when you finish this analysis.
3. In the "Sizes (Actual)" tab, enter the major segmentation criteria into the matrix (green area). Further refine those segments with minor segmentation
criteria (beige area).
4. Enter the market research data you have collected into the matrix to generate micro-segment sizes and calculate the Total Addressable Market for your
product.
5. In the "Segments (Actual)" tab, define your key market segments by merging the cells. Total up the market segment size and add a description like in
the example.
6. Once you have selected the key market segments to target, prioritize them using the exercise in the "Weightings", "Segment Analysis", "Rankings" and
"Segment Map" tabs.
7. In the "Weightings" tab, weight the importance for each prioritization criteria. Be sure that your total weight equals no more or less than 100%.
8. We have set up the evaluation criteria based on Competitiveness, Market Opportunity, and Attractiveness perspectives. Feel free to customize as you
see fit.
9. In the "Segment Analysis" tab, rank each market segment (Green, Amber, Red cells) on a scale of 1-10 based on the criteria.
10. In the "Rankings" tab, sort the results to identify the segments that are most attractive to your business presently.
11. View the automatically generated "Segment Map" and "Chart" tabs which provide visual representations of the data from the segment analysis.
12. Identify which segments to target and which to ignore and communicate your findings internally with key stakeholders.

Market Segmentation & Analysis Tool

Demographic (who they are)
B2B

B2C

Psychographic (how they think)

B2B

Behavioural (what they do)

B2C

B2B

B2C

B2B

Age

Resistance to Cha Brand Preference

Website Visits

# Employees

Income

Market Focused

Response to Mark Where they shop

Industry

Marital Status

Open-Minded/Rigi Conservative/Libe Purchasing Metho Store preferences Management Styl

# Locations

Education

Decision Process

Enviro-Friendly

Memberships

Memberships

Purchasing Proces Payment Methods

Years in Business

Family Size

Early Adopter

Hobbies

Internet Usage

Internet Usage

Purchasing Power Shipping & Receiving

Markets Served

Gender

Growth vs. Static

Lifestyle

Collateral Consu

Impulsiveness

Business Culture

Products/Service

Geographic Locati Tech Sophisticatio Information Sources

Job Title

Social Circles

Professionalism

Service Preference

Level of Experien

Occupation

Require Referrals

Buy based on trends

Awareness of opti Spontaneous

Risk Aversion

Influenced by peers

Loyalty

Relationships

Technology

B2C

Annual Revenue

Price Sensitivity

Purchase History

Environment (where they are)

Country of Residence

Purchasing Power Political Climate

Currency

Languages Spoken

Company Size (Revenue)

United States
Australia

International Markets

Canada

100M+ Revenue 5-100M Revenue

2,496

184,953

0-5M Revenue

Total Addressable Market (TAM)

73,895

2,429,133
29,054

1,495

1,204,493

78,395

784,960

69,392

For this example, we have selected a fictional company that sells

helpdesk software and is looking to target organizations in Englishspeaking countries (USA, Canada and Australia) and do further
segmentation based on the size of company (annual revenue). This
is designed to give you a sample of how you might want to consider
setting up your market sizing and segmentation.

Company Size (Revenue)

0-5M Revenue

Segment

Market Segment Sizes

Small
Business

928,247 small businesses in

USA, Canada & Australia

North
America
Corporate

1,420,996 mid-sized and large

corporations in USA & Canada

Australia
Corporate

79,890 mid-sized and large

corporations in Australia

United States

North America Corporate

Australia

International Markets

Canada

100M+ Revenue 5-100M Revenue

Small Business

Australia Corporate

Minor Criteria 2

Minor Criteria 3

Minor Criteria 3

Minor Criteria 2

Minor Criteria 1

Major Segmentation Criteria 2

Major Segmentation Criteria 1

Minor Criteria 1

Total Addressable Market (TAM)

0
-

Determine the major and minor segmentation criteria you will be

using and plug them into the green and beige cells on the matrix on
the left side of this worksheet. Conduct market research to identify
how many target organizations (B2B) or consumers (B2C) fit your
segmentation criteria. Plug the numbers from your research into the
matrix. This will calculate an overall number for the "Total
Addressable Market" for your product. You might want to use
information resources such as Hoovers, Dun & Bradstreet, Jigsaw, or
ZoomInfo to gather data.

Minor Criteria 3

Minor Criteria 3

Segment 1

Minor Criteria 2

Segment

Minor Criteria 2

Segment 2

Minor Criteria 1

Major Segmentation Criteria 2

Major Segmentation Criteria 1

Minor Criteria 1

Segment 3

Market Segment Sizes

Market Segmentation & Analysis Tool

Weighting Scale
Competitiveness

Market Opportunity

Attractiveness

Ability to
Differentiate

Competitive
Intensity

Barriers to
Entry

Market Size

Growth Rate

Profitability

Strategic &
Technical Fit

Capabilities

Maturity &
Timing

15%

15%

20%

10%

15%

5%

10%

5%

5%

Ranking Criteria & Definitions:

Ability to Differentiate - is there a specific competitive advantage that you can provide to this market?
Competitive Intensity - are there few competitors actively engaged in this market segment? Are they weak?
Barriers to Entry - are there any major barriers to entry (technology, patents, distribution, etc)?
Market Size - how large is the total addressable market?
Growth Rate - what is the anticipated growth rate for this segment?
Profitability - are profit margins attractive?
Strategic & Technical Fit - how aligned is this market opportunity with our strategic direction?
Capabilities - do you have the technical capabilities to effectively compete in this market?
Maturity & Timing - how mature is this market? Is now the right time to enter?

Total
100%

Market Segmentation & Analysis Tool

Competitiveness
Market Segments
Weighting

Ability to
Competitiv
Differentiat
e Intensity
e

Market Opportunity

Barriers to
Market Size
Entry

Growth
Rate

Profitability

Attractiveness
Strategic &
Maturity &
Technical Capabilities
Timing
Fit

15%

15%

20%

10%

15%

5%

10%

5%

5%

Australia Corporate

North America Corporate

10

Small Business

Sample Segment

Undesirable Segment

Market Segmentation & Analysis Tool

Note: Sort by selecting all cells then click "Data"in the navigation menu and "Sort". You can sort by Segment Score (Largest to Smallest).

Market Segments

Segment Score Competitiveness

Market
Opportunity

Attractiveness

Australia Corporate

7.4

3.8

2.5

1.1

North America Corporate

6.7

3.0

2.3

1.4

Small Business

6.5

3.5

2.4

0.7

Sample Segment

4.3

1.4

1.7

1.2

Undesirable Segment

2.4

1.0

0.9

0.5

Highly Competitive

Top Priority
Segments

Attractiveness

High

Bubble Size = Market Opportunity

Low

Segments to Ignore

Low Competition
Competitiveness

Low

High

Market Segment Rankings Chart

Australia Corporate

Ability to Differentiate
Maturity & Timing

Competitive Intensity
North America
Corporate
6

Capabilities

Barriers to Entry
1

Small Business

Sample Segment
Strategic & Technical Fit

Market Size

Profitability Growth Rate

Undesirable
Segment