When it comes to marketing, there are a plethora of strategies companies employ to best present their product. First, it solves the solution according to the consumer’s needs. One of the most basic marketing tools is market segmentation. It allows companies to group off different kinds of consumers with varying needs, demographics, or unique responses to products. Therefore, it can be better to target their specific wants. Second, market segmentation is a marketing strategy that involves segmenting or grouping potential consumers in a target market. It has share homogeneous characteristics.
First, market segmentation refers to dividing a market into smaller segments of buyers with distinct needs, characteristics, or behaviors. It might require separate marketing strategies or mixes. (Kotler & Armstrong, 2014, p. 192).
Second, market segmentation is the method for achieving maximum market response from initial marketing resources. It can be recognizing differences in the response characteristics of various parts of the market.
2. Characteristics of Segmentation in Market
First, identification. To facilitate the division of the market in various segments based on some common characteristics. It was relevant to a particular product or service. Therefore, the marketers must be in a position to identify these characteristics. It is easy to recognize certain segmentation variables. Thus, they are easily visible or observable.
Second, Measurability. Another characteristic ascertains the degree of measurability of the size and purchasing power of the segments. The marketer must be able to determine the size of the market. They need to find out how many people are there in the segment and the location. Besides that, the marketer must be able to measure the sales potential of the particular segment. They will able to determine the extent of influence of the marketing mix elements on the particular segment.
Third, Stability. Marketers would like to target consumers’ behaviors and can predict them. The marketers want to be sure of the stability of the consumers in terms of their demographic and psychological characteristics. Consumer’s wants and needs are likely to grow faster over some time.
3. Benefits of market segmentation
In this paragraph, I will like to share the benefits of segmentation in marketing.
First, it can increased market share. This is one of the major benefits of segmentation in the market. Through proper segmentation and targeted ads, it can increase the market share of the company. Besides that, it also helps firms identify the best possible ways to further deepen. It also widens the range of marketing strategies.
Second, it helps to improve campaign performance. Market segmentation can help you to target the right people with the right messaging at the right time. Segmentation enables you to learn more about your audience. Therefore, you can better tailor your messaging to their preferences and needs. Targeting a specific segment that is likely to be interested in your content or product. It is much more effective than targeting an overly broad audience.
Third, it also helps to inform product development. Market segmentation can also help companies to develop products that better meet the needs of their customers. You can create products to appeal to the needs your main market segment may have. Besides that, you also can develop different products tailored to different parts of your customer base. Designing your products with the needs of your customers in mind will help you to sell more. It also will make your customers happier. lotame.com
First, Sports. Big sports brands like Adidas, Nike, Puma, Reebok, Joma, etc. These big sports brands often send out targeted marketing campaigns. These are to sports clubs, players, athletes, fans, supporters, etc. It bases on the type of sports playing.
Second, Fashion Houses. Big fashion brands like Fendi, Versace, Zara, etc. These fashion brands send out a targeted marketing campaign to customers. It according to the demographics in gender, age, income, lifestyle, location, etc.
Third, Aviation. Big airline companies segment their target market according to the buying power of their customers. Besides that, for customers who reside in areas of high-income, premium offers are targeted to them. While mid-income earners have offers that suit their demands.
5. Importance of Segmentation in Market
First, customer retention. For starters, those cohesive customer segments will lead to good customer retention. Capturing customers at the beginning of a perfectly tailored customer journey will provide an excellent brand experience. It also increases the likelihood that they will stay loyal to your brand. Every message and product shared with them needs to resonate in some way. Therefore, they will feel difficult when saying no to you.
Second, lower spend rate. If you know how to speak to your customers correctly, you’re more efficient with your efforts, which means you spend less money. By segmenting your customers correctly, you’ll get it right every single time. learn.g2.com
Third, adjustments in marketing appeals. Companies can make the best possible adjustments to their product and marketing appeals. They can create a separate marketing program designed to satisfy the needs of different customers. Instead, no need aimed to draw in all potential buyers for the one marketing program.
Fourth, creating a product design. Another way to use market segmentation is to help with discovering and shaping new products. This strategy provides better insights into what product design matches the demands of the target audience. Mainly, it can design products with high market potential. It also can be directed to meet the satisfaction of the target market.
6. Possible Levels of Market Segmentation
First, mass marketing. Companies have not always practiced target marketing. Thus, it followed mass marketing characterized by mass-producing. Besides that, mass distributing and mass promoting the same product in about the same way to all consumers. The traditional argument of mass marketing is that it creates the largest potential market. It can lead to the lowest costs and translate into either lower prices or higher margins.
Second, niche marketing. Market segments can define as large identifiable groups within a market. Niche marketing focuses on subgroups within these segments. A Niche is a more narrowly defined group. It is usually dividing into sub-segments. Besides that, it can define a group with a distinctive set of traits. Therefore, it may seek a combination of benefits.
Third, segment marketing. A company that practices segment marketing recognizes that buyers differ in their needs, perceptions, and buying behaviors. The company tries to isolate broad segments that make up a market. It can adapt its offers to match more closely the needs of one or more segmentation. Besides that, segment marketing offers several benefits over mass marketing. The company can market more efficiently.
7. Common Segmentation Mistakes to Avoid
In this paragraph, I will like to share the common segmentation mistakes to avoid. First, making your segments too small or specialized. Segments that are too small will be more difficult to organize or inaccurate. Therefore, they can distract from your objective. Like sample size, an over-segmented group can yield data that is not statistically or directionally significant. Second, not allowing your segments to change. It needs to stay focused on ROI. If your strategy isn’t working efficiently for your business, it may be time to switch things around. Third, try to ignoring new potential personas. Customer profiles will change. Therefore, don’t get too attached to your segments. They will evolve with the market.