Market segmenting is a critical part of any marketing professional’s job. It allows businesses to categorize their customers into different segments based on price, products or other key attributes. There are many different strategies to creating a market segment, or properly segmenting a market. To help your company grow efficiently, it is up to a marketing manager like yourself to properly segment your customers in order to provide enhanced value.
Marketing Segmentation Definition
Of course, you might be wondering, what is marketing segmentation? Even for the newest marketing professionals, the textbook definition might not be readily available in our memory. However, it is a basic marketing strategy that allows you to divide a market into segments of consumers, products, interests and more.
Identify Your Customers
The primary purpose of what is marketing segmentation separates customers into different groups. This allows your marketing efforts to focus on a specific set of customers. When your marketing efforts are targeted on a select group of customers, you have a better chance of getting through to the right people. Marketing segmentation can group potential customers by various interest, geography, income levels or other demographics. Once you have identified which customer groups you would like to target, you can follow through with the segmentation process.
Time And Effort
For any marketing manager, the marketing segmentation process can be as long or short as you desire. As in any field, the more time you allocate to the segmenting and targeting, the longer you will take. However, the results could be drastically different when using collaboration software. If you budget a short amount of time, you might have market segments based on customer type and distribution channel. If you budget a lot of time, you might achieve marketing segmentation by product price, customer background, distribution channels, geographic location and more. The more time you put into your market segmenting strategy, the more options you will have to expand your markets.
Expand Your Markets
Marketing segmentation will help you expand your markets. By properly targeting customers based on their socioeconomic status, price preferences or feature demands, you are much more likely to find untapped markets. These opportunities usually have massive potential for growth. It is one sure way on how to expand business because the competition has not divided the market to meet specific demands like you are. Thus, your company can gain a significant advantage to attract and retain new customers.
Communicate Your Results
Once your marketing segmentation is complete, it is time to present to the owners or senior managers of the company. Here, you should be able to communicate how you have divided the customer base so that they can be targeted better. The market segment presentation should reveal which customer segments are currently being served. Then, it should explain which segments have potential for increased sales and profits. And, there should be a compelling reason why your company can fill that demand.
If you are able to properly execute market segmentation using these helpful tips, your company stands to benefit hugely. Proper market segmentation practices will effectively lessen your competition, which is an incredible advantage to make your business sustainable. When you have targeted your audience properly, you can have peace of mind that they are already more likely to prefer your company. This is particularly beneficial for small businesses, where it can be especially advantageous if your competition is not up-to-date on the latest marketing techniques.
If carried out properly, knowing what is marketing segmentation can have a huge impact on any business. As a marketing professional, you have the ability to add tremendous value to the organization. Simply put, invest your time into a sound marketing segmentation strategy and then communicate it well to the organization to expand into untapped markets.