Business Intelligence: Building a Market Segment and Vertical Graph

August 25th, 2009 by

By Pat Hinds

When working with companies who have not put a science to market share development, one of my first tasks is to categorize information of existing customers into smaller data sets allowing me to look for trends. In a growth orientated market companies acquire a diverse range of customers in multiple market segments and verticals. Companies can get so busy in a growth market that they do not take the time to accumulate business intelligence that will allow them to grow market share and improve profitability. A simple exercise is to build a graph that includes a market segment and a vertical breakdown; then tally the total amount of customers that you have in each segment and vertical. Below is a definition of market segment and verticals.

Market Segments: A market segment is a group of people or organizations sharing one or more characteristics that cause them to have similar product and/or service needs. A true market segment meets all of the following criteria: it is distinct from other segments (different segments have different needs), it is homogeneous within the segment (exhibits common needs); it responds similarly to a market stimulus, and it can be reached by a market intervention. The term is also used when consumers with identical product and/or service needs are divided up into groups so they can be charged different amounts.

Verticals: A vertical market is a group of similar businesses and customers which engage in trade based on specific and specialized needs. Often, participants in a vertical market are very limited to a subset of a larger industry (a niche market). An example of this sort of market is the market for point-of-sale terminals, which are often designed specifically for similar customers and are not available for purchase to the general public. Vertical marketing can be witnessed at trade shows.

Sample Graph

Enterprise (1000+ employ)      X               X
Commercial (100-999 employ)           X
General Business (1-99 employ)                          X

Sales Force Automation: After categorizing the verticals and segments the foundation is set to integrate into your sales force CRM. This will allow the sales reps and marketing teams to build campaigns around targeting specific market segments.

Topics: Business Intelligence