Business Model Canvas - Customer Segments
Karim Jabber, External Lecturer, Copenhagen Business School
According to Osterwalder and Pigneur, there are many types of customer segments. And various business models will address these customer segments differently. Business models can either address the mass market, niche markets, segmented markets, diversified markets or multi-sided markets, also known as multi-sided platforms.
Business models focused on mass markets do not distinguish between customer segments. They offer the same value proposition to all customers segments and deliver this offer through the same sales channels, and with the same type of customer relationship. For example, most companies selling consumer electronics, detergent or soft drinks address the mass market.
Business models focused on niche markets on the other hand, cater to one specific specialized customer segment. The core of what is being offered is the same, but the specific offer and methods of delivery and retention might vary. Which would require adaptations in value proposition, sales channels, and maybe also in customer relationships. For example, parts suppliers to the auto or aeronautics industry.
Companies serving multi-sided markets need two or more different customers segments for the business model to work. For example, Google that offers search services to individual consumers, as well as advertising opportunities to companies. Other examples, microfinance platforms, credit card companies.
One-for-one business model: one customer segment can be the charitable recipients of goods or services that have been subsidized by another customer segment. For example, TOMS shoes - for each pair of shoes sold by this California-based company, one pair of shoes is donated to a child in a developing country.
Business models focused on mass markets do not distinguish between customer segments. They offer the same value proposition to all customers segments and deliver this offer through the same sales channels, and with the same type of customer relationship. For example, most companies selling consumer electronics, detergent or soft drinks address the mass market.
Business models focused on niche markets on the other hand, cater to one specific specialized customer segment. The core of what is being offered is the same, but the specific offer and methods of delivery and retention might vary. Which would require adaptations in value proposition, sales channels, and maybe also in customer relationships. For example, parts suppliers to the auto or aeronautics industry.
Companies serving multi-sided markets need two or more different customers segments for the business model to work. For example, Google that offers search services to individual consumers, as well as advertising opportunities to companies. Other examples, microfinance platforms, credit card companies.
One-for-one business model: one customer segment can be the charitable recipients of goods or services that have been subsidized by another customer segment. For example, TOMS shoes - for each pair of shoes sold by this California-based company, one pair of shoes is donated to a child in a developing country.
This blog post is based on my learnings from the course on ‘social entrepreneurship’ offered by Copenhagen Business School through Coursera (2014).
nice
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