Would you like to be able to market your products and/or services to people who would benefit your business the most? Do you want to devise marketing campaigns and ads that you know for sure will appeal to some of your most important potential customers? There is in fact a way in which you can identify the types of people who form your clientele and divide them into different segments that you can later target separately. This is called market segmentation, and today, we’re going to tell you all about it and how you can use it for your business.
The main idea behind market segmentation is that people are different.
What Is Market Segmentation?
Market segmentation is a process in which businesses divide their customers, both those existing and potential, into segments. The segments have to be established in accordance with one or more shared characteristics. For instance, a business could choose to devise segments of clients based on their demographic profile, lifestyle, or even some of their common interests.
The purpose of market targeting is to find high yield segments. Those are the segments that have the potential of becoming profitable for your business. You can turn them into target markets and provide them with special attention so that you can reap the benefits.
The main idea behind market segmentation is that people are different. Thus, they require different promotions, offers, ads, prices, and so on. Apart from identifying the segments that would help your business grow, this type of marketing also helps you find out more about key segments. For instance, you can understand what motivates their purchases and what their needs are. This will be of great help for you when you want to come up with a marketing strategy that appeals to them.
How to Use Market Segmentation
No matter the kind of business you have, there are two types of market segmentation that you can use. You can choose a multi-segment strategy or a concentration one.
As the name suggests, the multi-segment strategy refers to focusing on at least two market segments. If you choose to go with this strategy, you’re going to have to come up with a different marketing program for each of the segments. The main advantage of this approach is the fact that if you target more segments, you’re automatically going to draw in more customers. The disadvantage is quite obvious: you’re going to pay more to develop two or more marketing programs.
The concentration strategy is the one that identifies only one market segment and focuses all of its efforts on it. If you do concentrate on only one segment, you’ll have the advantage of knowing it well. This will be of help when you try to come up with a marketing program for it. On the other hand, you should also consider the fact that you’re putting all of your eggs in one basket, so to say. This means that if the people in this segment suddenly stop being your clients, this will put a strain on your finances.
We hope today’s guide has taught you all you needed to know about the benefits of market segmentation for your business.
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