Resegment an existing market as a low cost entrant

Low-cost re-segmentation is just what it sounds like – are there customers at the low-end of an existing marketing who will buy “good enough” performance if they could get it at a substantially lower price? If you truly can be a low cost (and profitable) provider, entering existing markets at this end is fun, as incumbent companies tend to abandon low-margin businesses and head up-market.

Over half of startups pursue the hybrid course of attempting to introduce a new product that resegments an existing market. Re-segmenting an existing market can take two forms:

• a low-cost strategy or
• a niche strategy.

Market Segmentation is not the same as differentiation. Segmentation means that you’ve picked a clear and distinct spot in customers’ minds that is unique, understandable, and, most important, concerns something they value and want and need now.)

Part of book: The Four Steps to the Epiphany