Market segmentation is a marketing term that refers to dividing a market into smaller groups of consumers with common needs and who respond similarly to a marketing action. The goal of market segmentation is to allow a business to better target its products or services to different categories of consumers.
Main Benefits of Market Segmentation
By dividing the market into smaller segments, businesses can create marketing campaigns and strategies that are more targeted and effective, and can develop products and services that better meet the needs of specific groups of customers.
Market Segmentation helps you:
- To identify specific groups of customers who have common characteristics and needs,
- To create more effective, targeted and personalized marketing campaigns,
- To increase customer satisfaction and loyalty,
- To develop products and services that are more closely aligned with the needs of their target markets,
- To drive sales and revenue for the business.
Explanation of Market Segmentation
Market segmentation is the process of dividing up mass markets into groups with similar needs and wants. It assumes that different market segments require different marketing programs.
Demographic, psychographic, geographic and behavioral segmentation are the four pillars of market segmentation.
- Demographic segmentation: Demographic segmentation involves dividing customers into groups based on demographic characteristics such as age, income, gender, race, education, or occupation.
- Psychographic segmentation: Psychographic segmentation involves dividing customers into groups based on their lifestyle, personality, opinions, attitudes and interests.
- Geographic segmentation: Geographic segmentation involves dividing customers into groups based on physical location, assuming that people within a given geographical area may have similar needs.
- Behavioral segmentation: Behavioral segmentation involves dividing customers into groups based on their behaviors, such as decision-making patterns of customers and their purchasing habits. It assumes that consumers prior spending habits are an indicator of what they may purchase in the future.
There are several steps to follow when using Market Segmentation:
Step 1: Define the market,
Step 2: Identify segmentation variables,
Step 3: Collect and analyze data,
Step 4: Develop profiles of each segment,
Step 5: Evaluate the attractiveness of each segment,
Step 6: Select target segments,
Step 7: Develop marketing strategies for target segments,
Step 8: Launch and monitor.
How to Apply Market Segmentation
To apply Market Segmentation to your business, FITMINDS is providing an adoption of the model that fits your company and your company’s needs. Successful marketing segmentation campaigns can increase the long-term profitability and health of your company.
Contact us to get more information or discover your probable personalized roadmap for Market Segmentation.
Additional Tips and Readings
- For the basics of segmentation, you can read Redesigning Segmentation During COVID-19
- You can read Kotler’s Five Product Levels to define your segments based on needs and wants.
- To read more about Customer Loyalty, you can check RFM Analysis & Segmentation
- To learn more about specific targeting, you can read Buyer Persona
Contact us to develop successful marketing strategies via MARKET SEGMENTATION.
