A Step-by-step Guide to Market Segmentation
Why Segment? A business organization has scarce resources. And when they market their products or services, they cannot target random people most of whom may not be interested in their offerings. That is why, it is imperative for businesses to segment their market based on customers’ needs and design and execute the marketing plan accordingly.
Identifying the Segments Once your objectives from the segmentation process are clear, you should identify different segments from the population based on geography, demographics, employment, income and many other factors. You can also do a behavioural segmentation if needed.
Create Segment Profiles Once you have divided the market into different segments, you must list out the characteristics or qualities of each segment be it the demographics, psychology or any other factor. This would help you in planning out which segment to target for your multichannel marketing campaigns and how.
Find The Most Attractive Segment Once you have divided the market into different segments, you must identify the most attractive segment which consist of potential buyers for your products or services. If you have done a psychographic segmentation, you will have to choose your target segment based on the psychologies of your segmented groups. Also, you can select multiple segments that you think may need the products/ services that you offer.
Positioning Once you know who your target customers are. The next step is to position your brand/ product/ services in the minds of your target market. Brand positioning is one of the most important exercises which should be done meticulously.
Segment Expansion Segmentation is a continuous process. Once you have decided your target customer segment. You must invest continuously to expand your customer base and make improvisations based on competitive factors and changing consumer needs.
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