Marketing is no easy task. No matter what your business field is, it’s impossible to satisfy every consumer. People like different things. What’s more, their needs differ as well. The market is very vast, and the products are available in almost endless amounts. That means you can’t strive to satisfy everyone. So what do you do?
What is a Market Segment
Identifying market segments means identifying your ideal customer. Don’t worry, there’s more than one. When you’re done selecting target markets, next step is to find out the profile of your ideal customer — what they want and need and how they behave and operate. This is known as target marketing. Once you know what your target customer needs, you’ll be able to invest time, money, and effort to provide that for them. Furthermore, when you cater to all the needs your target customers have regarding products and marketing, as opposed to catering to some demands of all consumers, your brand will gain prominence, and the customers will see it as more valuable. Always go the extra mile.
Mass Marketing vs Target Marketing
Not that long ago, the best approach was mass marketing. Go big or go home, marketers used to say. Mass marketing entails mass production and delivering as many products to as many people as you can manage.
However, that’s far from the best approach today. Because there was less variety in the market, mass marketing used to be effective. However, nowadays, there are endless possibilities and numerous brands and products that the customers have to choose from. So how are you going to make them choose you with just mass marketing as your strategy? Well, you won’t.
Today, brands have the option of customising their products. They don’t have to rely on mass marketing because they have the opportunities to reach specific market segments and niches. Advertising and communication channels have undergone radical changes that allow brands to have a more narrow approach. Marketing at an individual level is much more effective.
How Does Target Marketing Work?
In target marketing, the goal is to attract as many people with similar needs. For example, if you own an airline that targets people with lower incomes and offers low-budget tickets, you don’t really care about the people flying first class, do you? No, you need as many people looking to fly for a cheap buck.
However, how do you make money in this scenario? How do you distinguish yourself from the competition? You can offer low-cost products and services and still make a hefty profit. You need to implement other strategies — like charge for in-flight meals, for example.
Target marketing goes beyond offering a low-cost product, of course. The main trait is limiting your reach to a specific target audience. That segment of the market can also be people willing to pay top-notch prices. However, you have to make sure that the market has room for growth and that the entry barriers are high.
Niche marketing also works for local companies. Conquering one segment of the market and keeping a firm hold on it is much better than going big and failing. If you have a local company, you aren’t going to aim your marketing efforts anywhere else but on your local community.
Local and individual marketing has become much easier with the benefits that the Internet marketing brought about. It makes your services and products more customisable, and you’re able to cater to more specific needs of your consumers. Of course, if you’re selling cars, Internet retail is out of the question, but there are many business fields where it’s a more than a viable option.
Market Segmentation
Market segmentation has several steps you need to follow:
- Identifying the market according to what they need and want.
- Analyse their usage pattern, likes and dislikes, lifestyle, and demographic.
- Note the growth potential of your market as well as your competition and the potential risk they may represent to your company.
- Analyse the potential profit of the market segment.
- Form your prices and design marketing programmes.
- Explore the entire market and potential expansion opportunities.
What Can Affect the Segmentation?
From the consumer’s standpoint, these are the factors that can affect the segmentation:
1. Location
Customers will gravitate toward your brand based on your location. It matters if you’re in a rural or an urban setting. Furthermore, the country and the region where you are based are also important
2. Demographic
Your target audience is similar, but there are differences between the individuals who make up your market segment. Age, gender, income, occupation, education — these are all critical elements to factor into your marketing strategy. What’s more, religion, family size, social class, etc., can also be used to influence the buyers to become your clients.
3. Lifestyle
Lifestyle and personality traits are essential elements you need to consider while looking for your target customer. You can segment the market quite effectively using these elements.
4. Attitude and Beliefs
Sometimes, people already have a formed attitude or an opinion about your brand. It’s logical to target those who are already aware of your brand and have a neutral or positive attitude toward it.
From the company’s standpoint, these elements can affect the segmentation:
1. Demographics
Before you choose a segment of the market, think about the size and the type of your company. Based on that, you can decide if your company is fit to cater to a specific group of people.
2. Operational Segmentation
The type of technology you use will define the requirements you can meet and the customer consumption needs you’ll be able to cater to.
3. Purchasing Methodology
How your company is positioned on the market and how it relates to your competitors relies significantly on the structure of your purchasing department and your purchase policy.
4. Personality Segmentation
Analysing the loyalty element as well as the potential risk the segmentation could bring to your company.
The last step of segmentation is finalising the market. It entails finding the right segment based on all the factors mentioned. When you identify the section, you can move forward and analyse it to find the best strategy on how to market for it.
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