Defining New Market Segments
There are a number of exercises and in-depth tools you can use to do this, but for our purpose, we simply want a quick way of listing what segments of the market you currently serve, and what other major market segments exist.
The following video shows how to do this for the following industries; Flow Measurement, Sheet Metal Fabrication, and Telecoms Electronics Assembly as examples. The process shown should be the same, or very similar for whatever industry you operate in. If you struggle to find what you are looking for, you can try using different search terms such as ‘industry report’.
As you may have noticed in the video, the second industry searched for, ‘sheet metal fabrication’, had a slow growth rate of only 1.4%. The video shows that the sheet metal fabrication industry serves the following other industries: (through segmentation):
In this case, the business owner should take a couple of steps to counter the slow 1.4% growth of the sheet metal fabrication industry. The first step would be to look at the individual growth rates for the segmented industries above to see which is growing the fastest and which is growing the slowest and to make sure that he is serving a growing market that is going to yield the most reward. These represent the Sheet Metal Fabrication industry segmented by End-use industry.
The second step would be to look at the Sheet Metal Fabrication industry segmented by Material type – as shown below and find the growth rates for each segment.
Grade 301 stainless
Grade 304 stainless
Grade 316 stainless
Grade 410 stainless
To do this you should use a mixture of search terms including the keywords “CAGR”, “growth rate”, “industry report”, and “market report”.
The likelihood is that one or more of these material types, or end-use industries will be dragging down the average CAGR (Compound Annual Growth Rate), so the business should focus its operations on serving the fastest-growing segments.
Although the cost of these reports can be thousands, you usually do not need to spend anything to get the information you require. Free information is often provided as a teaser to encourage users purchasing the full report at a later date. The information we need at this stage is often provided free of charge as part of a teaser’.
Word to the wise
Although this appears quite simple, sometimes it can be frustrating as a variety of publishers may release market reports for your industry. You may find that the first 1 or 2 websites you click on don’t disclose the information you require, but 99% of the time the third one will. So just bear in mind that you may have to scan through a few different search results before you get the information you want.
It often takes some proper time and effort invested in your market research to get good usable data, but it is out there if you keep looking.
There is also a slight learning curve as you get used to using the correct search terms, i.e. knowing when to search for ‘industries’, when to search for ‘sectors’, and when to search for ‘segments’. But as you do this it will become intuitively easier and the benefits to your business could be huge as this activity can have a real transformational effect on your company.