Tue 24 Oct 2006
Dividing your customer base into segments is a helpful way to more effectively target them. There are a number of ways to divide customers into segments. One of those ways is on the price/value spectrum.
On one side of the spectrum are the people who will spend whatever is necessary to get good value. On the other side of the spectrum are the people who want to buy the product at the lowest possible price and who will willingly forgo value to do so. In the middle are the average shoppers looking to balance value and price in a reasonable way.
My advice to new business owners looking to start a business: forget about the price shoppers. Instead, focus on the groups looking for more value. Although the price shoppers can be a valuable customer base, they are also potentially fickle if you can't maintain your low prices.