Market segmentation strategy is a way of dividing a large market into smaller units. The units share among them some common characteristics. The use of this strategy is a growing trend that has been continually adopted by many business entities. By creating these segments, it is easier to address the specific needs of each consumer or group of consumers. In the end the consumer is happy and the returns are higher for the business.
For one to divide the market into the said units, they first need to conduct research. The research will help identify the exact needs of the customers and how best their needs can be addressed. It will also help the business in determining the criteria that can be used in creating the segments. Market research may take days, weeks or months depending on how large the market is.
There are many ways that can be used to collect the required information. Some of the research tools that can be used include email surveys, questionnaires, face-to-face interviews and telephone interviews among others. The information that is targeted includes bio data, geographical location, personal preferences and so on. Customers that give similar responses are put into the same groups so that their needs can be addressed in the same way.
There are several criteria that can be used in the creation of segments. The most commonly used characteristics include gender, age, tastes and geographical location. The difference is age is an important determinant of demand for goods and services. In general, the elderly tend to be conservative while the young are more likely to accept changes. When producing goods and services it is important to have this in mind.
Gender has always exerted great influence on demand and supply for goods and services. Men and women have tastes and preferences that widely vary. For instance, women are more aware of changes that take place in fashion and are more likely to conform. They also shop more regularly than their male counterparts. Having this information is very important for the producer.
Seasonality in demand is a form of behaviour segmentation that is fairly common and affects a variety of goods and services. The demand for certain goods increases during certain seasons and decreases thereafter. If the producer has this information, then they will make sure that the goods in question are produced at the required time and adjust downwards later to avoid unnecessary losses.
Behavioural segmenting is also done based on product loyalty. The customers are classified into different groups depending on the degree of loyalty. Those that are most loyal should ideally be rewarded so as to encourage them. Factors that are contributing to lack of loyalty should be identified and dealt with.
Market segmentation strategy ensures that both the producer and the consumer are happy. This happens because the specific demands of consumers are identified and dealt with and when the consumers feel that their demands are well addressed, they are ready to spend and the business gets good returns. This is very different from the traditional approach where customers were placed into a single heterogeneous group.
For one to divide the market into the said units, they first need to conduct research. The research will help identify the exact needs of the customers and how best their needs can be addressed. It will also help the business in determining the criteria that can be used in creating the segments. Market research may take days, weeks or months depending on how large the market is.
There are many ways that can be used to collect the required information. Some of the research tools that can be used include email surveys, questionnaires, face-to-face interviews and telephone interviews among others. The information that is targeted includes bio data, geographical location, personal preferences and so on. Customers that give similar responses are put into the same groups so that their needs can be addressed in the same way.
There are several criteria that can be used in the creation of segments. The most commonly used characteristics include gender, age, tastes and geographical location. The difference is age is an important determinant of demand for goods and services. In general, the elderly tend to be conservative while the young are more likely to accept changes. When producing goods and services it is important to have this in mind.
Gender has always exerted great influence on demand and supply for goods and services. Men and women have tastes and preferences that widely vary. For instance, women are more aware of changes that take place in fashion and are more likely to conform. They also shop more regularly than their male counterparts. Having this information is very important for the producer.
Seasonality in demand is a form of behaviour segmentation that is fairly common and affects a variety of goods and services. The demand for certain goods increases during certain seasons and decreases thereafter. If the producer has this information, then they will make sure that the goods in question are produced at the required time and adjust downwards later to avoid unnecessary losses.
Behavioural segmenting is also done based on product loyalty. The customers are classified into different groups depending on the degree of loyalty. Those that are most loyal should ideally be rewarded so as to encourage them. Factors that are contributing to lack of loyalty should be identified and dealt with.
Market segmentation strategy ensures that both the producer and the consumer are happy. This happens because the specific demands of consumers are identified and dealt with and when the consumers feel that their demands are well addressed, they are ready to spend and the business gets good returns. This is very different from the traditional approach where customers were placed into a single heterogeneous group.
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