Business Model Generation Playbook

Customer Segment

5 plays

Hand drawn illustration of

Important for this playbook

The customer segment is the specific group of customers that a business targets and aims to serve. Each customer segment has its own unique needs, preferences, and behaviors. Businesses can use different models to target and serve different customer segments.

Business Models for Specialized Demands

The business models listed under “Customer Segment” all share a common thread of tailoring products and services to specific groups of customers. Aikido, for example, is a strategy of leveraging the strengths of one’s competition to create a unique value proposition for customers. Similarly, the “Bottom of the Pyramid” strategy aims to provide goods and services to low-income communities, while the “Long Tail” strategy targets niche markets that have been previously overlooked. Lastly, the “Ultimate Luxury” strategy is focused on providing highly exclusive and luxurious goods and services to a select group of high-income customers.

Understanding the Customer

All of the above business models prioritize understanding the customer and their unique needs. The “Aikido” model requires a deep understanding of one’s competition and their strengths and weaknesses in order to create a unique value proposition. The “Bottom of the Pyramid” and “Long Tail” models both require a thorough understanding of niche markets and the specific needs and desires of the customers within those markets. Finally, the “Ultimate Luxury” model requires an understanding of the wants and needs of high-income customers in order to provide them with the luxury goods and services they desire.

Tailoring the Offer

All of these business models also require the ability to tailor the offer to the specific customer segment being targeted. The “Aikido” model requires creating a unique offer by leveraging the strengths of one’s competition. The “Bottom of the Pyramid” and “Long Tail” models both require offering goods and services that are tailored to the specific needs and desires of the niche market being targeted. Finally, the “Ultimate Luxury” model requires offering highly exclusive and luxurious goods and services that are tailored to the wants and needs of high-income customers.

Aikido illustration

Recipe

Aikido

Use the strength of an attacker against him or her

Bottom of the Pyramid illustration

Element

Bottom of the Pyramid

Sell affordable products with low profit margins in high numbers

Long Tail illustration

Recipe

Long Tail

Sell small quantities of a large range of niche products

Ultimate Luxury illustration

Element

Ultimate Luxury

Sell exclusive products and services to very top financial bracket

Customer Loyalty Program illustration

Element

Customer Loyalty Program

Create incentives for long-lasting relationships

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