Market Segment Creation: Creating a $10 Million Category
For many years, major department stores carried only two categories of jewelry: costume and luxury. Between the low-price costume jewelry segment (starting at $2.99) and the high-ticket luxury market (starting at $500), my colleagues and I identified an untapped market.
The vast middle of the jewelry market had no products designed for it, despite great potential for jewelry priced between the costume and luxury categories. We had to create a new market segment. We called it bridge jewelry.
Bridge jewelry offers the precious metals found in higher-priced items, while keeping prices low enough to be accessible to a large number of customers.
To create this segment, we designed new products, developed new merchandising and pricing structures, and changed the way the products were displayed in stores.
The Bottom Line
Creating this market segment led to:
- Adoption of the segment by department stores, and later by all mass-market retailers
- US$10 million in revenue for my company
- A segment whose total value is nearing $500 million.
Let’s discuss the ways that market segmentation can benefit your business.