Marketing is one of the key components for any business or organization to meet their goals and objectives. It helps them reach their targeted audience, which in turn connects businesses to more prospects. Market segmentation involves identifying the specific segments where you would like to sell your product/service. You can then follow strategies that will help you tap into these particular segments of the market.
You need to be able to identify whether your current market strategy is appropriate for your target market, or if it necessary to make adjustments before sales start slowing down. This article will discuss how you can tell if your existing market targeting is working effectively or not (i.e., whether you are targeting the right market).
Benefits:
There are several benefits associated with effective market segmentation. First of all, it enables you to gain more new customers. If your product/service is able to draw interest from multiple audiences, then the potential for growing the business increases. Secondly, it also helps you retain existing customers (i.e., loyal patrons). You can follow up with them through targeted marketing promotions and campaigns that make sense to them; thus creating brand loyalty
Maintain market share:
Ensuring adequate market share penetration is crucial for any business organization or company. Without having a good grip of the market that they serve (and target), companies will find themselves in direct competition with similar products of other firms on price alone. This may lead to reducing prices so low until they are either unprofitable or below the cost of production for a specific product line.
Market Segmentation:
The first step to identify your target market is through market segmentation. There are various ways that you can go about this process, but it depends on how much information your company already has available and what type of questions you want answered from doing the research.
The following lists some general tips for determining which market segment to target: Peter DeCaprio
– Geographic location (i.e., city, state)
– Demographic variables (i.e., age, gender)
– Psychographics (firm graphics in combination with demographics in order to create a more in depth analysis of who they are and why they buy into certain brands and products)
– Behavioral variables (i.e., buying behaviour, shopping patterns)
Example:
If you were selling a particular product and you wanted to know more about the people who buy into that industry, then the best way to go about this would be through demographic and behavioral variable market segmentation. You could first start off with identifying all the geographic locations where your target market lives; for example, country wide, state or province. Then you can look at specific cities within those areas and see how many people live there as opposed to other surrounding areas like suburbs or rural towns. With this information in hand, you can now focus on uncovering as much as possible through psychographic variables such as age range and gender of your prospective buyers.
Industry:
Different industries operate in different market segments. For example, a retail clothing store will target a very different demographic from a car dealership. In addition to this, marketing strategies must be appropriate for the specific industry that they are targeting. There are various types of businesses and organizations out there that you can consider when looking at which market segment would work best for your product/service.
The following is a list of some general ones to get you started:
– Retail stores
– Restaurants & Bars
– Automotive Dealerships
– Financial Institutions (i.e., Banks, Credit Unions)
– Educational Facilities (i.e., Universities, Colleges)
– Non-profit organizations
– Governmental agencies
– Residential homes & building companies
– Commercial realtors/agencies/builders
Demographics:
Demographics are characteristics of a population. The most common demographics are age, gender, race, ethnicity, income level and education level. Marketers use this information to better understand their customer base so they can target them more effectively. This is also used for market segmentation. Some demographic variables include marital status, number of children in the household and occupation. Knowing these things will help marketers know how to better reach out to their customers through targeted marketing strategies that appeal directly to their specific needs. For example, if someone who makes less money than others purchases your product then you could focus on special pricing deals to make the product more affordable for them.
Psychographics:
Psychographics look into your customers’ lifestyle and personality traits. This will help marketers determine what types of marketing strategies they should use to appeal to their customer base and will include variables such as attitudes, opinions and beliefs. This can also be referred to as values, interests and lifestyles (VALS). For example, if you see that an opposing team’s jersey is made by a different brand than yours, you might approach one of those players or coaches about using your brand rather than theirs so more people will buy your jerseys.
Conclusion:
Knowing your target market is an important aspect of your marketing strategy, says Peter DeCaprio. Identifying the demographics and psychographics of your potential customers will give you a better idea about how to target them through marketing strategies.
