Segmentation is the process of dividing consumers into different groups in order to increase the company’s profit. Segments are created according to a set of particular variables, such as age, occupation and geographical location. A product or service can be tailored to suit each segment’s needs and desires. This article will provide you with everything you need to know about market segmentation theory including how it works, its pros and cons, examples in practice and practical advice for using this strategy successfully at work – all you need for a deep understanding of market segmentation theory. Tiktokstorm will help you to get a bigger audience and get more followers, likes and views at an affordable price.
market segmentation theory
The impact market segmentation has on big VS small businesses and startups:
Market Segmentation Theory: a bit about the nature of market segmentation.
Those include:
Market Segmentation Theory: the reason for market division.
To give you an example:
Takeaway:
Market Segmentation Theory: market segmentation is not only about customers.
Market segmentation is all about knowing where when and how to position your business.
Age in market segmentation:
Timing in market segmentation:
Market Segmentation Theory: Customer interaction.
Market segmentation also takes into account the way that customers interact with the brand.
It’s not only about differences:
Market segmentation also takes into account any similar characteristics between market segments.
Market Segmentation Theory: customer types.
Target market segmentation involves taking all the characteristics of customers and mapping them out into four categories.
In modern marketing, target market segmentation theory isn’t just a bunch of abstract idea. It’s an active process that determines the strategic positioning of competing products in the marketplace. In fact, various types of marketing segmentation is the basis of creating a marketing and promotional campaign that actually works. It’s all about knowing the ins and outs of who you want to sell to, where and when.
Given the range of crucial information it covers, market segmentation can be a complicated task. It does require analyzing a whole host of factors. Such as product features, price, brand name, and target market, for instance. But these are just a few basics. There are so many details and breaking, grouping and structuring the data into functional, useful lumps.
Source: Alanis Business Academy
The impact market segmentation has on big VS small businesses and startups:
Market sementation is an essential part of deciding which marketing strategies to pursue. What are the correct approaches that can have a significant impact on overall business sales. As well as a success of a particular project. Yet very few companies are willing to spend the time and resources necessary to perform this type of analysis correctly.
That’s why even the most successful companies fall far short of their marketing goals due to poor market segmentation. Now, it might not seem like that big of a deal for huge corporations. They still get more than enough profit. (Even if they could double or triple that with a smart market segmentation strategy.) We can’t say the same about small businesses and startups. Market segmentation is absolutely necessary and should be a part of the initial business operation plan.
Market Segmentation Theory: a bit about the nature of market segmentation.
In business marketing, target market segmentation isn’t simply the act of breaking down a large consumer base into smaller ones based on various criteria. That usually happens via focusing on key traits that distinguish one product from another.
Instead, it is a process of identifying and designing a unique marketing message that effectively addresses the needs of a specific group of customers. For example, it wouldn’t make sense to market to middle-aged men if your product offers senior discounts, because they aren’t going to be the main audience for your product. Market segmentation also includes the process of identifying and understanding customer segments within a market.
There are different types of market segmentation. The most important ones that can be further broken down can be summed up in four basic types.
Those include:
Segmenting according to demographics. For example, dividing your target market according to their age or generation (Gen Z VS Boomers or Gen X);
Geographical market segmentation. Means dividing your target market according to the place of their residence, home country, city and so on (Washington DC VS Boston or NYC);
Psychographic or behavioral. Here, you observe your target market’s characteristics that determines their buying decisions (purchasing habits, what is it that makes them check out the product or a service, or an ad).
Niche market division. You may operate in a food industry at large. But narrowing down your niche determines who exactly you want to target (catering VS fast food chain or a book cafe that sells drinks and snacks would target completely different group of people).
Market Segmentation Theory: the reason for market division.
woman standing beside the table
It’s actually pretty simple. One, everybody is unique. While all customers have similar characteristics, their individual behavioral and psychographic attributes vary significantly. In fact, the similar characteristics can be summed up in all of them are human beings that spend money on their wants and needs. Other than that, each one of them is unique.
Two, people love personalized products and experiences. Whatever it is, could be an item or a blog post, offer something unique and you have their attention.
Now this is not to say you have to sit there are come up with three hundred million unique ideas to cater to tens of thousands (or hopefully more) customers you are going to get throughout your business lifetime. This is where market segmentation comes in handy. You can group those tens of thousands (or more) people into smaller groups. And instead of catering to an individual you will cater to a thousand of individuals who happened to share lots of similiarities.
To give you an example:
Let’s imagine you are operating a flower business. Meaning you have a medium sized store where you sell flowers and assist customers in decorating paces when hosting parties or during important occasions. You also have a website your customers can order your service from. How can you use market segmentation to your advantage?
First of all, focus on the local. Setting up a website and trying to create a social media marketing campaign with the mind of target global audience will cost you tons of money you won’t be getting back. Your niche is selling flowers. They will simply whither and die if you fly them across continents or even from a city to city. That’s unless you spend enormous amount of money of special tools and chemicals and packaging and landing a contract with an airline and distribution… Your shop is medium sized by the way.
Right so first things first, locals. Because you have that straight you can now observe what appeals to the local market. Perhaps having an outstanding customer service can give you more customers than a store across the street with larger selection of plants and flowers. Observing their purchasing habits is a part of psychographic market segmentation.
When targeting demographics you have to know that elderly will likely prefer in store purchase over scrolling through a website. So make your webstore appeal to younger generations. You can stick to minimalistic aesthetic and complicated website architecture, youngsters will figure it out anyways. They like cool, unconventional stuff so it’s likely they will appreciate something unique like that.
Takeaway:
You see, all four basic types of segmentation can play key aspects in analyzing your market. The analysis is absolutely necessary when it comes to planning your promotional and sales strategy. It is a framework you need to build, adjust and fix particular approaches you want to implement to achieve the ultimate goal of any business. Which is, more sales, greater authority and strong brand image.
Market Segmentation Theory: market segmentation is not only about customers.
market segmentation theory
Target market segmentation considers the differences between different sets of characteristics to determine what each group of customers look like, behaves like or dislike. Although that’s true, it’s not all about customers. It’s as much about you and your business as it is about who you are targeting. YOU are positioning YOURSELF and your BRAND across the market.
Market segmentation is all about knowing where when and how to position your business.
This process can be largely referred to as geo-cultural market segmentation. Market segmentation also involves identifying market segments based on their gender identity, occupation, education level, religion, political, social or cultural preferences and specifics.
We have talked a lot about various types of market segmentation. Now let’s talk a bit about timing in this aspect. First of all there’s age.
Age in market segmentation:
The first step in effective age market segmentation involves analyzing what kinds of products a market segment buys most of its products. In general, buyers are more price sensitive than buyers in other markets.
Therefore, products within a given age and gender group are likely to be bought more often by these customers compared to products available to younger customers or by older consumers in other groups. Consequently, advertisers can target their ads to these groups to maximize their reach. Similarly, age-specific marketing strategies such as cross-age marketing are usually more successful for this market segment than cross-age marketing for other groups.
Timing in market segmentation:
Now let’s go back to the example of a flower shop above. The fact that you are set on operating locally gives you an important insight when it comes to marketing timing. You know the schedule. And that is very important for correct placements of your ads, various promo campaigns and physical (as well as digital) store operation.
You have the information about the best timing when your business can get most engagements whether it’s a web-store or a physical store. On top of that, you can plan ahead special campaigns for all the important dates such as public holidays, anniversaries, big charity events and such. You also know when taking a day off won’t affect your business negatively.
A big sports event coming to your city or country? You are going to know ahead so that you can adjust to the particular situational marketing demands according to whatever is the most appealing for locals and tourists. It’s simply mind-blowing how much benefit market segmentation can get your business.
Market Segmentation Theory: Customer interaction.
space gray iPhone 6
Market segmentation also takes into account the way that customers interact with the brand.
In general, customers who buy online tend to use search engines more frequently and are more likely to purchase online than customers who buy through other channels. Because search engines rank messages more highly among Internet users, an Internet company that places more importance on search engine optimization messaging will find itself in a better position to attract new customers.
However, there is a flip side to this strategy as well: if an Internet company places heavy emphasis on search engine optimization messaging, it may not necessarily lead to increased online sales. This is because Internet users who search for a brand online are less likely to convert to buyers. Fear not, this is why implementing social media in your marketing campaign has become so popular.
TIP: Whatever you niche, use at least one out of the most popular social media websites. These include Facebook (great for affiliate marketing, focus on big groups), Twitter (great for tech niche), Instagram (great for anyone and anything please be active on Instagram), YouTube (a bit hard to implement for small businesses and start ups but try it out as you grow), Tik-Tok (a simpler alternative to use in the place of YouTube; and will give you faster results), Pinterest (great for fashion, food and art niche), LinkedIn (great for B2B and authority growth).
It’s not only about differences:
Market segmentation also takes into account any similar characteristics between market segments.
For example, customers who are relatively young or relatively inactive may be more apt to use social media platforms than customers who are more mature with demanding office jobs. It is therefore important for marketers to take a careful look at how they use different marketing strategies to analyze which methods will work for them and which ones will not. They should also be prepared to change their strategies when it becomes ineffective.
Market Segmentation Theory: customer types.
market segmentation theory
Market segmentation also includes looking at any four types of customers: first-time customers, repeat customers, existing customers and ideal customers.
Each type of customer has distinct characteristics, and they each differ in their purchasing behavior. First-time customers are typically characterized by an overall lack of purchasing power, having limited experience buying on the Internet and being uncertain about making purchases online.
In contrast, repeat customers are those customers who have previously bought from a company and continue to do so on a regular basis, ideal customers are those customers who strongly agree that they need a particular product or service and have therefore repeatedly purchased from that same company and are therefore considered ideal customers.
Target market segmentation involves taking all the characteristics of customers and mapping them out into four categories.
All these four types of customer are important in marketing campaigns as they can then be used effectively to determine the target market and its target products or services. The techniques that are used in target market segmentation vary according to what type of businesses one wants to target. However, all these techniques are closely related and depend largely on the traits of customers and their buying habits. These traits have to be analyzed carefully as otherwise, there would be no point in using marketing strategies.
