Browse all lessons

Answer – Segmentation

in

This is the suggested answer to the Segmentation exercise on Colorado Ricardo Mountain Bikes.

Market segmentation bases: demographic, geographic, behavioural and psychographic

Segment 1: Off-Road Riders in Neighbouring States (Geographic)

Riders with the same behaviour and motivations as Colorado Ricardo’s existing customers, but based in states such as Utah or Wyoming. This segment wants exactly what the current product already delivers – the difference is purely geographic, making it a natural fit for a Market Development strategy rather than a new product.

Segment 2: Urban Gravel and Commuter Riders (Psychographic and Behavioural)

Riders drawn to the growing gravel-bike trend, motivated by fitness and commuting rather than off-road thrill-seeking. This segment wants a lighter, more versatile bike and very different messaging from the “built to survive the mountains” story that appeals to Colorado Ricardo’s core customers – it would likely require a genuinely different product, not just different marketing.

Key point: segmentation only pays off if each segment is large enough to be worth targeting, reachable through the business’s marketing, and meaningfully different in what it wants – not merely statistically different from the rest of the market (Smith, 1956).

These two segments map neatly onto two different quadrants of Ansoff’s Matrix – neighbouring-state riders point toward Market Development, while gravel and commuter riders point toward Product Development.