Understanding your target market is vital for every business you carry out and it also one of the facts you should always keep in mind during your marketing/advertising campaign. For this, it is important you to know and understand all about your market segmentation and learn about the benefit of using it as a focal point of your marketing strategy.
If you do not know what market segmentation is, I would gladly explain it: “It is the process of dividing a whole market of a product or service into groups of people with similar needs”. By doing this division, you have the benefit that each group responds in favor to your specific market strategy.
In order to clarify you this definition I am going to cite the example of cell phone sales. At the very beginning, cell phone vendors were only focusing on a wide market. In other words they were using a small marketing segmentation or no segmentation whatsoever. This means, their target audience was very broad. Let’s just remember when cell phones just came to the market about 20 year ago, first vendors did not have that much competition so this strategy actually worked for them.
However, in the meantime when more competitors joined into this market, cellphone companies were forced to apply new strategies mainly focused in specific market segments such as small businesses, families, younger customers, and consumers in search of media communication via pictures and messaging.
The market segmentation process focuses mainly on creating portions of your whole market. For example, if you’re selling shoes, your market would be “footwear” but this market has its own segmentations and it is important for you to define which segment of the market you’re targeting. For example, the market of footwear can be segmented into “shoes for children, footwear for sports, women etc..”. Once you have defined your segment you can surely create a market strategy that works, and in order to make work your strategy there are two variables that help you analyze even further the segment you have chosen.
When you’ve decided to use marketing segmentation as part of your strategy, the market segmentation variables will help you to understand the behavior and response of your specific target audience to your marketing strategy.
Benefit variables are related to your customer needs as they are useful to identify the market segments in basis of the benefits expected by your customers. For example, the market for the tooth paste has many benefit segments. The main benefit for parents could be preventing of tooth decay in their children. Meanwhile, the benefit for teenagers could be having fresh breath. In both cases, the tooth paste is the product with two different market segments (parents and teens).
Demographic variables are referred to certain characteristics that describe and help to determine whether your prospects are potential buyers. Some examples of demographic variables are marital status, gender, occupation and average income.
By nature, demographic variables are insufficient to perform a full market analysis by themselves. It is impossible to implement any prediction and marketing strategy having only the data provided by these variables. This is because these variables are to general and provides generic information, but they really help to gather information about your prospect and combined with the “benefit variables” it is possible to complete a full market segment analysis.
Just a quick summary: Market segmentation is the process of dividing your market into specific niches so you can develop specific marketing strategies for each niche. By doing this “separation” you have a higher change to have a positive response from your advertising campaigns. Using marketing segmentation variables in your research gives you details about your market segments, these details can help you to create a more accurate strategy and have better results and therefore more sales.Posted on: Business Marketing