US Market: To make it BIG, aim SMALL

Targeting a narrow customer segment is critical when entering the US market. Segmentation is a marketing strategy that has its place in any country, but is of vital importance when planning for the US market.

There are two reasons for this.

First is the sheer size of the country. In the United States, the population is spread over a large and varied territory. It is comprised of many different states and regions, which each have their own particular culture, industries, ethic groups and socio-economic strata.

The second reason is that the population has become quite demanding in terms of personalization. A good example of this is the launch of an increasing number of services that offer individually tailored products. For example, people in the US can sign up to receive a monthly package with an assortment of clothes chosen especially for them based on a questionnaire, including not just size and body type, but likes and preferences.

These trends have created a consumer population that now expects an increasingly high level of customization. As a result, they might then have a lukewarm response to more generic products.

When we speak with business leaders from different countries however, especially countries with a relatively small population, we find that although segmentation is a widely understood principle, the extent of what is needed is hard to imagine.

Even if you define your target segment by US geography (region, state, or city), and proceed to further narrow it down by ethnic, demographic and socio-economic differences, that is still only the tip of the iceberg, and you will have to explore further to uncover the next level of segmentation as well.

To do that, we need to understand that many Americans tend to have very narrow interests. Thanks to the large population, they are able to band together with others who share those interests and pursue them even more deeply. One has only to look at TV programming, which offers hundreds of channels - one for almost any possibly activity or pursuit - along with the multitude of websites dedicated to extremely pointed topics.

So, what have we learned?

To be successful in segmenting your audience, you must study it in depth to understand their psychological and emotional motivations. When you do, you will become an expert at tailoring to their preferences in a way that no other competitor does. Your message will resonate strongly, and they will see you as an expert and thought leader in that particular subject.

Once you have become the specialist in their eyes, you will be differentiated in the market. Your product or service will have a following of loyal customers, even advocates, and you may be able to command a premium price.

Of course, not all products lend themselves to this particular strategy. But it is important to understand segmentation and to consider using it in order to more easily and effectively enter the U.S. market, particularly as a foreign company without an established reputation.

Sophie Lechner, President & CEO of Global Commerce Education, Inc.

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