The sum of current and potential buyers of a product is called the market. So the market is made up of buyers. The process of separating products according to the nature of the buyer is called market segmentation. Market Segmentation is one of the vital marketing strategies to increase your product and services to the target audience.
Market segmentation with examples
Market segmentation is a process that divides the entire market into smaller segments based on different characteristics. Market segmentation is a buyer-oriented and modern process.
Thus, dividing the market into smaller segments based on the buyer's needs, habits, tastes, preferences, purchasing power, and different market characteristics is called market segmentation.
Levels of market segmentation
Apart from natural causes, every consumer is different due to needs, tastes, habits, preferences, etc. In such a situation, to meet the needs of consumers, the entire market has to be divided based on certain characteristics and behaviors. Good market segmentation should be done to survive in a competitive market system.
By considering the whole market as a single market or by viewing the selected market segment by dividing the entire market into different market segments. The levels of the market segment are discussed below:
Marketing for all buyers is called mass marketing. The marketing conducted to meet all the buyers' needs and demands are called mass marketing. As a result of mass marketing, the possibility of providing goods or services to all categories of consumers is observed. The market segment is usually ignored in mass marketing.
Product Variety Marketing:
The marketing program is centered on multiple markets by dividing the whole market into different products, and the marketing mix is called product variety marketing. In this context, Philip Kotler and Gary Armstrong said, "Divided marketing is the creation of a single large segment that forms the market and adapts marketing activities to the needs of one or more such segments."
Sub-divisional or Niche Marketing:
The marketing program adopted for each segment by dividing the market into smaller segments based on individual characteristics is called sub-divisional or niche marketing.
A niche market is sometimes called micro-markets, but a micro market can also be a particular segment in a larger marketing campaign.
Niche marketing is the act of targeting a smaller demographic by focusing on specific needs or desires. It focuses on having relevant messages for the targeted audience, leading to more effective advertisements and promoting goods and services.
In this regard, Philip Kotler and Gary Armstrong said, Sub-divisional marketing is the activity carried out to get special benefits from sub-divisions with distinctive features. There is only one or a small number of competitors in this case. As a result, the level of competition is not so high.
Many businesses want to expand their market by achieving niche markets. If you can find what your customers want and need, you can appeal to it and create products to fit those needs and wants. It will help bring in more money for your business because you're appealing to a target audience that wants something.
Small or Micro Marketing:
The program of marketing the product according to the specific person or location is called small or micro marketing. In this regard, Philip Kotler and Gary Armstrong said, "Th" practice of product development and marketing programs according to specific individuals and locations is called micro-marketing. Small marketing can again be of two types.
Namely: (a) local marketing, (b) private marketing.
From the above discussion, we can say that the company can divide the market into different parts based on the need. The main purpose of market segmentation is to market a product or service according to the nature of the consumer.
4 Types of Market Segmentation
Market segmentation can be done in four ways: demographic, geographic, psychographic, and behavioral. Age, gender, occupation, and income level are all factors in demographic segmentation. Geographic segmentation is based on a per person's location. Values, attitudes, and lifestyles classify people into psychographic groups.
Behavioral segmentation is based on people's shopping habits, such as where they go and what they do.
In geographic segmentation, the market is divided based on different regions (such as northern, southern regions), districts, cities, villages, etc. After geographic segmentation, marketers try to sell products in one, or several, or all areas.
However, the marketer markets the product in the area where the maximum profit will be possible due to the location. Again the marketer has to take individual marketing activities for each region.
Because buyers in every region may not have the same characteristics, fast food is more popular in urban areas than in rural areas; winter clothes are sold all year round in winter-prone countries.
Demographic segmentation is a market segment method in which a company's market is divided into groups depending on factors like age, income, gender, education, etc. How many demographic elements are in this method; The entire market is divided based on age, gender, income, family life cycle, occupation, nationality, education, etc.
For example, Horlicks has introduced energy drinks for children of different ages. Again, Apex Shoes is marketing different designs and types of shoes based on age and gender. Both are examples of Demographic segmentation.
Marketers use psychographic segmentation to determine how to place their items so that potential consumers can find them. It'It'sw businesses determine which customers are the best fit for them relying on their views and habits, quality of life, personality, and socioeconomic status of customers.
Suppose the market is divided into segments based on geography, movement, product value expectations, etc. It is referred to as psychological separation.
As a result of market segmentation in this way, buyers, on the one hand, On the other hand, marketers are also more efficient in purchasing products in line with their tastes and quality of life can sell products in quantity.
For example, the Calvin Klein brand designs and markets different clothing and accessories for daily and formal events in keeping with the consumer sites and personality. This is an example of psychographic segmentation.
Market segmentation can also be done based on consumer behavior towards the product. In this case, the basis of behavior refers to what kind of benefits can be obtained by enjoying the product, consumer attitude towards the product, use of the product, and knowledge about the product. Such as-, consumers buy shampoo for various reasons; sometimes to get rid of dandruff, or for shiny, silky hair, or to keep hair healthy.
Depending on the reason for using the shampoo, this consumer segmentation is called behavioral segmentation.
I think you will be clear about marketing segmentation through the above-market segmentation examples.
The four types of market segmentation process at glance :
- Demographics (age, gender, income level)
- Geographic (countries or regions)
- Psychographics (personality types and lifestyle choices)
- Behavioral segmentation (buying habits of different people).
Essential conditions for effective segmentation:
Different divisions can be seen in a market. However, not every section is successful or efficient. Market experts have identified five basic requirements for successful market segmentation.
The market segmental and purchase power have to be definable.
To avoid risks and duplication, marketing firms in any industry must have access to intermediaries, advertising media, and the or organization's promotional activities, among other things.
Relatively small Market segmentation does not become lucrative. As a result, each classification must be as broad as necessary. A ship corporation, for example, may form a sub-market of one or two customers, but chewing gum manufacturers' forts are entirely non-profit. As a result, the competition must be fragmented to compete in a dynamic market.
Since target customers have diverse desires, the market is segmented. The market should be split for the accepted market share so that separate campaign mixes must be used.
Finally, there must be the ability to develop services that can win market share.
A firm's resources to promote its goods and services are marketing efforts. A corporation can increase its exposure with potential customers by increasing the desire and concern for its products through marketing operations.
Identifying Target Market
A target market is a group of people who are most likely to buy or need a company's or services. It is also important to find out the target audience. The target audience is the set of target customers who are most likely to desire your goods or services, thus the ones who might see your advertising efforts. Age, gender, wealth, geography, interests, and various other criteria can all influence who your target audience is.
Advantages of Market Segmentation
Market segmentation is a relatively recent concept in marketing planning and thinking.
The following are the benefits and drawbacks of market segmentation. –
A company will widen the demand for its goods and boost revenue by segmenting it. Retail sales rise when a vendor splits the market into many segments and performs individual marketing campaigns.
Analysis of Alternatives in Comparison:
Market segmentation allows them to compare and evaluate marketing trends. Because of the high level of competition, the vendor will be able to assess the needs of each subdivision and make the necessary attempts to increase revenue. The sub-segment of the industry in question is the best field for the salesman to market his product when various rivals cannot sufficiently satisfy the buyer.
Market segmentation tactics assist the vendor in "ad" using" b" tween inventory and sales marketing practices. The merchant should use different programs to address the demands of different buyers instead of formulating a single marketing campaign to target all types of prospective customers simultaneously.
Facilitating Marketing Program Execution:
Assistance with marketing activities: Marketers should plan marketing activities and budgets based on their understanding of individual consumer segmented. The bidder will invest more money in the department with the highest demand.
Choosing the Right Market or Customer:
Producers may determine their goods' exact demand or customer category using market segmentation. As a result, the company's in the competitive market will be strengthened.
Product Delivery in Response to Demand:
Traders may observe various sub-markets as a result of market segmentation. They will take advantage of the consumer's petite in this manner.
Business segmentation allows marketers to specialize and extend their offerings. As a result, a robust marketing campaign is implemented that aligns with audience preferences, desires, and variants. As a result, marketing activities become more direct and successful.
Expanding Your Marketing Options:
A manufacturer uses market segmentation to position customers close to one another. As a result, it can respond quickly to shifts in the commodity market by adjusting bets, plans, and so on.
Getting the Most out of Your Marketing Budget:
It is important to divide customers into various categories. As a result, the marketer will set a budget based on the requirements and strengths of various market segments. It is cost-effective, and it is therefore easy to avoid campaign waste.
Publicity and Promotion:
Consumers can understand the demands of various sub-markets due to market segmentation. The bidder will settle on marketing and promotion in light of the need for a specific market. Because of the above debate, it can be concluded that a wide industry is split into several sub-markets to align the company's marketing program with the needs of the market.
In the end, you should follow market segmentation strategies to make a profit from your business. Marketing strategies can improve the performance of your products. To acquire a competitive edge, marketing tactics might be used.
Market segmentation strategy
There are several elements to consider when it comes to market segmentation to develop an appropriate and profitable strategy. Some of the most vital facets:
-Your target market's demands and desires
-Each market segment's size and potential
-The resources available to serve each market segment
-Each market segment's competitive landscape
You may start developing specific marketing plans and strategies for each category once you clearly understand these elements. Product positioning, price, communication, and distribution are examples of this.
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We will discuss following topics later:
- Marketing strategy
- Types of market segmentation
- Potential customers
- Brand loyalty
- Segmentation strategy
- Customer segments
- Marketing messages
- Entire market
- Customer loyalty
- Existing customers
- Broad audience
- Target audiences
- Behavioral data
- New markets
- Online store
- Small business
- Buyer persona
- Life insurance
- Education level
- Personality traits
- Demographic information
- Conversion rate
- New products
- Segmentation demographic