Thematic Case

Overall Programme

How to use segmentation strategies to realise business opportunities and maximise impact

Market systems development (MSD) programmes, indeed all development programmes, are commonly given a target group at their outset. At the highest level, this might be the whole population of a country. In other cases, it can be much more granular, for example, poor people (or extremely poor people), women, young people, refugees, people with disabilities, or people from ethnic minorities. While it is rarely interrogated in sufficient detail, many programmes will be given targets associated with different subsegments of their target group, for example, 50% of programme beneficiaries should be women.

There are gaps in the conceptualisation of the role of segmentation in MSD programmes (the why) and a simplistic interpretation of methods for segmentation (the how), with the result being that the market segments used in MSD programmes (the what) are often crude. This leads to missed opportunities for programmes to generate impact and for our partners to realise their own objectives.

This case discusses the multiple purposes of market segmentation and outlines improved methodologies for segmentation. It includes examples of LIWAY’s more sophisticated approach, demonstrating that segmenting markets, on both the supply and demand side, can be a critical part of business success, although it is currently insufficiently practiced in emerging markets.