It is very important that you define the target market to whom you would like to sell your product or service. Market research is the instrument which can provide important information about the market and how it is best served. The aim of this type of market research is market segmentation.
What Is A Market Segment?
A market segment is a subsection of a market which is made up of individuals or organisations with one or more characteristics which cause them to demand similar products and/or services based on qualities of those products for example price or function.
The purpose of segmenting a market (in other words, dividing it into subgroups) is to allow your marketing/sales programme the opportunity to focus on the subset of prospects who are ‘most likely’ to purchase your offering. If done properly, segmenting the market – and then focusing on your most likely prospects – will assist with ensuring the highest return for your marketing and sales expenditure.
Dependent on whether you are selling your offering to individual consumers or businesses, there are obvious differences in what you will consider when you are defining market segments.
What Methods And Techniques Can You Use To Determine Market Segmentation?
The concept of market segmentation has assisted marketing decision-making since the evolution of marketing. The aim of market segmentation is to divide the total market for a product or service into smaller groups of customer segments according to:
- Their characteristics,
- Their potential as customers for the particular product or service in question, as well as
- Their differential reactions to marketing programmes.
As segmentation seeks to separate significant differences among groups of people in the market, it can assist marketing decision-making in at least four ways:
- Segmentation helps the marketer by singling out groups of customers to whom he could more effectively ‘target’ marketing efforts for the specific product or service
- Segmentation assists the marketer in order to avoid trial-and-error methods of strategy formulation by providing a deeper understanding of these customers upon which they can tailor the strategy
- In helping the marketer to address, as well as satisfy customer needs more effectively, segmentation aids in the application of the marketing concept
- On-going customer analysis – as well as market segmentation – offers important data on which long-range planning (for market growth or product development) can be based.
Market segmentation can assist you with improving the performance of your marketing campaigns by assisting you with targeting the correct people, with the right messaging, at the right time. Segmentation gives you the opportunity to learn more about your audience so that you can better tailor your messaging to their preferences as well as needs.
In a recent survey of marketing professionals, 62% of respondents reported that improving audience segmentation – in order to enable more precisely targeted messaging – was a top priority. There’s a reason why improving segmentation was the most often reported priority in the survey. Market segmentation provides many benefits to marketers, publishers and others.
Marketing segmentation is one of the cornerstones of digital marketing and something which all self-respecting digital marketers need to master. You can get on top of this with our Advanced Digital Marketing Course. Follow this link for more information.
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