You’ve heard it again and again: Know your customers. Know how they are different. Know what they want and what they need. This is the foundation of marketing.
But your customers/consumers are not one large amorphous group. Individually they have qualities, traits, habits, needs, lifestyles and a myriad of other things that distinguish them from the larger group. It’s nearly impossible to promote or sell one product or service to an indistinguishable mass market using a single approach. That is why we segment the market.
Market segmentation is the process of dividing the one huge consumer group into smaller groups with similar needs or characteristics. These smaller groups or segments are often referred to as “submarkets”.
Markets can be segmented in an almost infinite number of ways. For example you can segment by socioeconomic status, marital status, and stage of life, education, purchasing habits, race, and zip code and so on. The segmentation categories depend largely on how you plan to use the information.
Market segmentation can benefit your business by helping you to:
- Develop effective, targeted communications and promotions that resonate with specific segments of your market
- Design products that truly meet the needs of the marketplace
- Identify underserved market segments (niches)
- Determine which segments your competition is serving
- Gauge your organization’s position in the market (how are you perceived compared to how your competition is perceived)
If you would like to find out more about Market Segmentation Studies, call us.