Market Segmentation Strategies
You might have developed a great product and might have a top-notch marketing strategy, but stills fail to generate revenue as expected. Then you are definitely using the wrong approach. Your campaign may not be appealing to a targeted audience. Aren’t you aware of smart marketers? Smart marketers target a specific group of audience and then personalizes their pitches accordingly. Then how to determine your audience? That’s where you need to execute market segmentation in your marketing strategy.
As a manufacturer, you have a diverse market to target. Market segmentation is such a process of dividing a diverse market of potential consumers into groups, segments, and based on several characteristics. Each segment comprises of consumers who respond similarly to marketing strategies and shares a similar interest, needs, or locations.
What is Market Segmentation?
Segmentation can be defined as any process of bifurcating or dividing the process into simpler or smaller units or processes with relatable characteristics. Marketers can’t cater to an entire population for a product or service. Therefore, population or audience needs to be segmented into meaningful groups based on marketing data such as demographics, genders, age, geographic, etc. Market segmentation is the core of marketing. Its a process of identifying a set of groups with similar needs, demands, properties that can be used by companies for advertising or promotions. Once the market segmentation is done, the companies can use the data more accurately and can design their strategies accordingly. Market segmentation can have an extensive impact on marketing strategies. It enables marketing professionals to tailor product and branding strategies in a way that attracts your audience. The objective of drawing market segmentation is to eliminate the risk of product failure and to gain maximum market share. Companies with efficient market segmentation enjoy significant advantages. According to a study by Bain, it was found that companies with great market segmentation strategies enjoy 10% higher profits than other companies.
Types of Market Segmentation
- Demographic Segmentation: Demographic Segmentation is the widest, simplest, and easiest way of market segmentation in practice among the marketers. It sorts the market based on several elements such as age, gender, education, income, locations, occupations, etc. It’s the simplest form of market segmentation as it divides the market into products or services we buy; how much we willing to spend all of such are based on the demographic factors.
- Geographic Segmentation: Referred to as a subset of demographic segmentation, it’s the easiest way of market segmentation as it sorts the consumers on the basis of geography. Your consumers may have different needs, interests, preferences based on their geography.
- Behaviour Segmentation: Behavioural segmentation divides the consumers based on their behaviors and decision-making patterns such as lifestyles, age, gender, and usage. For instance: Young buyers may buy hair serum, whereas people of older ages will buy hair oil.
- Psychographic Segmentation: Psychographic Segmentation is a type of market segmentation which takes into account the psychological aspects of human behavior by dividing the audience on the basis of their lifestyles, behaviors, and attitude. For instance, large industries such as fitness use Psychographic segmentation to sort their consumers into different categories, such as people who want to live and who cares about fitness and exercise.
Importance of Market Segmentation
- Enhanced Profits: Consumers have specific needs, variable income, and sensitive to different price tags. By segmenting the market, you can target the specific group and subsequently enhance the profits.
- Focus: Unless with the attempt to capture a wide range of markets. Market segmentation encourages marketers to focus on a specific market. Addressing a larger market can be detrimental to your success, and you can’t put much effort into each one. You make your market segmentation more appealing using these superb PowerPoint Templates.
- Competitiveness: Market segmentation gives you a competitive edge over other competing businesses. The better you know your customer, the better you can cater to unique approaches and even lets you tailor your marketing strategies, which matches their needs and wants.
- Gain and Retain More Customers: By marketing products that appeal to the audience at different phases of life assists the business in gaining customers who may switch to competing brands.
- Market Expansion: Market segmentation such as Geographic segmentation lets enables the business to expand its market immediately as you cater to the needs of a specific area. You can expand your reach to nearby markets. This will let you identify new potential customers.
If you have efficiently segmented your market, you can market your products that are likely to be successful. Market segmentation lets you cut marketing costs. It enables us to be specific on planning and provide better results.