Evaluating segments

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All segmentation efforts are made with one goal in mind – to begin the process of targeting. The process begins with evaluating the identi fied segments considering criteria like market factors, competitive forces, and the company’s capabilities. The second phase is to select the appropriate targeting strategy of either undifferentiated, differentiated, concentrated, or customised marketing.

This McKinsey 9 box matrix is one of the frameworks companies can adopt when evaluating the attractiveness of the segments, especially when they are looking to priorities one over another. Sorting brands into these 9 categories is an important starting point for the analysis. For example, a strong brand in a weak industry is in a very different situation than a weak brand in a highly attractive industry.

If a brand is placed above the diagonal line, a company may pursue strategies of investment and growth. Those below the line, may consider moving out of that industry or reducing their investments and involvement.

To interact with the McKinsey framework through their interactive tool, please click here.