Market segmentation can simply be defined as the marketing strategy that involves dividing a broad market into different subset groups of consumers who have common needs as well as priorities and then designing and implementing strategies in order to target their needs and also desires through media channels and other touch points that allow easier access to them. Market segmentation is of great importance for the companies serving larger markets. Consumer segmentation similarly is the process of classifying people into groups that do have some set of similar characteristics thus resulting in the ability to be targeted and studied.Categories of segmentationGeographicThis involves dividing up geographic markets by using the existing boundaries, population boundaries and natural climatic zones. It enables us to segment a market that is spread over a very large geographic area into sub-markets that cover smaller geographic areas. In geographical segmentation the market is divided into different geographical units such as; regions (by country, state, nation, neighborhood), Population density (urban, suburban, rural), climate (size of an area, population size and growth rate) and climate where regions have climate patterns that are similar.A company that is either serving a few or generally all the geographic segments, requires to put more attention on variability of geographic needs and wants. Immediately segmentation of consumer market on geographic bases is done, companies localize their marketing efforts such as production, promotion, advertising and sales efforts.DemographicThis segmentation occurs when one or more demographic traits are employed in order to divide the market. Demographics are quantitative characteristics of a particular group of people. These characteristics include age, gender, income, education, occupation, social class, family size, generation, family life cycle, religion, home ownership, ethnic group and nationality. Most businesses that segment their market in terms of demographics area attempting to lay their target o specific segments of the market that are most likely to be interested in what they have to offer.Demographic segmentation is the most popular form of segmentation for three reasons;First consumer needs, wants as well usage patterns often reflect closely in demographic profiles. This means that people with different demographic traits often will have different needs and wants with respect to products. An example is where preference for music and other forms of entertainment are often tied to differences in age, occupation and also educational backgrounds.Second, demographic data is very simple to obtain therefore there is a very huge amount of published demographic information that is available from a wide range of sources. Most of this information is available on the internet where you can easily get information such as census data by accessing the Census Bureau’s homepage.Finally demographic segmentation is the most common employed market segment because even if we use an alternative segmentation base such as benefits or consumption rates, we will still use demographics in order to profile the segments that are being created. For this reason, most firms prefer to use demographics to simultaneously create as well as profile the market segment.PsychographicsThis segmentation divides market based on differences in lifecycles, social class or differences in personality traits. Psychographics are attributes of a market that are qualitative and refer to the way people think and also what they like to do. Psychographic variables include interests, personality, opinions, self image, values, activities and attitudes. Market segments based on lifestyle entails creating segments based on differences in how people choose to live their lives. Lifestyle is highly predictive of many behavior purchase therefore marketers attempt to characterize lifestyle patterns of consumers by asking them questions about their activities, interests as well as opinions. The items of AIO can be used to segment markets by looking for the response patterns that are common to such types of questions on surveys.Consumption Behaviors SegmentationThis segment includes product consumption or rates of usage. Some other segmentation present in this category are product usage occasion, product user status and also loyalties tom some specific brands.When creating market segments that are based on use of product occasion, emphasis is put on identifying different occasions or circumstances under which the product is used. This product may be used on by different people on different occasions or circumstances. Example most airlines have segmented markets into occasion segments that comprise of people flying for purposes of business i.e. business flyers, vacation flyers and those people flying for family reasons. Each and every segment represents a different usage occasion and is each segment is targeted with a different strategy for pricing and promotion.Marketers who employ product user status segmentation attempt to identify differences between non-users, regular users, potential users, ex-users and also first time users of the product. Most of the large firms in the market do target non-users or potential users in an attempt to stimulate the product’s primary demand. The smaller firms on the other hand target regular users in an attempt to encourage switching of the brand. Most marketers put an effort in trying to differentiate between users and non-users of product categories when the characteristics of a consumer are tie d to the need of the product itself instead of use of different brands.Firms can learn and gain a lot by analyzing customer loyalty patterns in the market. They can do this by finding the characteristics of those customers who are loyal and non loyal for their brand and those of their major competitors then find ways to keep their customers loyal and attract the non loyal ones from their competitors. Brand loyalty is defined based on the consumer’s pattern of how repeatedly the customer makes a purchase.Consumer Predispositions segmentationThis entails creating segments based on the differences in the needs, wants and attitudes of the consumers. Markets can be segmented based on the level of peoples’ knowledge on a particular product category. This can be done by having in place different programs for promoting the products in order to communicate with those consumers who know little about the product and those who don’t know about the product.Segmenting the market based on media viewing habits of consumers, may reveal consistent differences in what type of media the consumers prefer may it be television shows, magazines, radio stations and newspapers and how these differences vary with the demographic and psychographic traits of the customer. Such information can be used to target advertising as well as other communication to groups of customers.ConclusionThe more the segments marketers are able to identify and also combine to target individual groups that are most interested in what they have to offer, the more effective their marketing efforts can be. Businesses puts much effort to learning as much as they can about their customers including where they live, their income levels, age, what they like purchasing and what they like and dislike. Using this information can be used to reach non customers
With the ever changing face of the economy based on varying factors [such as government protectionism, automation of industries, downsizing of companies] the trend to more and more people choosing to start their own business for various reasons continue to rise. With that said – along with this trend there is an increasing need for structured marketing process and client acquisition processes and methodologies to be utilised within these businesses in order to transform a startup into a fully functional revenue generating entity.It is often the case that many smaller businesses are product rather than market focussed. In many cases we find that there is no actual marketing department so to speak of and as a consequence the function of marketing within the company ends up being fulfilled ‘as and when’.We can contrast this to what we find in any larger organisation or corporate; we find an actual marketing department, with qualified marketing professionals who are analysing the market, target customers and competition, they continually look for trends and movements in their chosen space in order to refine the marketing message and continually push the communication through the channels. This is to include the distribution channel [where appropriate], print media, radio, catalogues etc, etc and of course the use of digital marketing channels [social media, email marketing, video marketing, micro blogging and more].The above is what leads to the typical ongoing market penetration that we see within these organisations leading to new products and services development a steady stream of new clients and the nurturing of existing clientele.It is with the smaller organisation in mind, the solopreneur or work from home business owner that any strategic business attraction marketing blueprint is targeted towards. This is one or two steps down from making use of an in person consultant that will look to understand the business operations and put specific structures in place that when followed; will first provide a deeper understanding of the market place and target market clients but will also provide the foundation for providing the products and services that the intelligence directs the company towards producing.It is recommended that organisations looking to add structure and processes to the marketing and client acquisition aspect of their businesses direct their energies to these main fundamentals.
Client Strategy & Preparation
Setting Up Key Business Processes & Systems
Getting Clients While You Sleep
Follow Up & Retention
1) Gaining a deeper understanding of the needs, desires and behaviour of the clients no matter what the industry will drive the decisions that are made in relation to the products and services that are developed and presented to the market space.2) Key systems and processes such as continuous market intelligence related to pricing and customer behaviour can help to take the organisation to the next level and gain a significant competitive advantage over other companies supplying related or similar products and services.3) The marketing process for bringing new prospects into the marketing funnel must be an ongoing activity; whilst focusing on servicing existing clients it is imperative that someone is taking care of make new clients aware of the needs that your organisation can fill.4) Too often it is the failure to followup and keeping in touch that leads to the loss of valuable customers; depending on the business tools such as email marketing, videos, membership sites and print media may be used in order to stay at the top of the mind of the target customer.Once the process has been developed it will then be a matter of refining it [say once a quarter] whilst some is taking care of the execution which will lead to new customers, sales and products and services leading to increased revenue generation.