To manage a business effectively, you need to have a solid grasp of the facts in your domain of operations. You'll collect data that answer your questions about the domain and measure the environment's responses to the actions you take. Every business will ask different questions, make different plans based on the answers, and execute their plans differently. The data they have will be different. But many of the facts they use will be common to them all.
For example, one company might gather data about the age profile of its local market. It could use this data to design a product for the largest age segment. This company defines its product and the target segment in its own terms. However, “product” and “segment” are concepts that travel outside the company. The company's understanding of “product” has to match that of its customers and competitors. Its understanding of “segment” has to match that used by the marketing community in general.
Note that this doesn't mean there is, for example, a standard market segmentation that everyone must use. Every organization is free to slice up the market however it sees fit. The commonality comes into play when you start comparing segmentation schemes with each other. They're all different – but they're all segmentation schemes.
Similarly, on the product side, a sector doesn't have to have a rigidly defined product portfolio common to all players. But the sector is likely to share the outlines of a product category scheme. And it will certainly share a core understanding of what “product” means in the sector. In the next part of this series, I'll look at how facts like these are organized into models, so that they can be used in effective management processes.
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