Undoubtedly, the most virtual rule in marketing is that understanding of the target audience; his age, education, interest, and gis income. This explains why most of the marketers intend to using Market Segmentation.
What is Market Segmentation?
In Short, It is the segmentation of customer markets into homogenous groups of customers, each of them reacting differently to promotion, communication, pricing and other variables of the marketing mix. Ideally, relevant differences between buyers within each segment are as small as possible.
Thus, every segment can be addressed with an individually targeted marketing mix. they need to divide a market into similar and identifiable segments through market segmentation.
Types of Market Segmentation
1- Demographic segmentation
It categorizes the customers based on their age, race, religion, income, education, and family size…etc.
2- Psychographic segmentation
It categorizes the customer based on their personality and interests. For example, customers can be segmented based on their preferable brands, lifestyle, attitude, or degree of loyalty.
3- Geographic segmentation
It categorizes the customers based on their location such as area, city, country, and regions.
4- The single market segmentation
it is the most focusing plan as it pinpoints only one segment based on the above-mentioned strategies. One of the examples of this strategy is ROLEX luxury watch brand that focuses only on rich consumers who can afford its price.
5- Multi-segment strategy
Unlike the single market segment, the multi-segmentation focuses on more than one consumer type expanding the based of the business to reduce risk.
One of the examples of multi-segmentation Marriott International that provide different levels of residencies such as the Marriott Suites for the permanent vacationers, the Fairfield Inn for economy lodging and the Courtyard By Marriott for business travellers.
Benefits of Market Segmentation
1- Understand their customers
The market segmentation helps the design team to define the research scope and subsequently build a product that meets with the customer’s needs. At the beginning of the design thinking process, the design team needs to apply a research phase where they tend to understand their audience needs and subsequently build a persona that represents the target audience.
It is possible to satisfy a variety of customer needs with a limited product range by using different forms, bundles, incentives, and promotional activities.
2- useful of the marketing team
When the company aims to establish a new brand in the market. it tends to define the market segment that needs to address. This can be in an early stage of product development stages. Both the marketing and design team should have a clear understanding of the targeted market segment in order to ensure that both teams are aligning their strategies together.
3- Attract more customer
Targeted marketing plans for particular segments allow to individually approach customer groups that otherwise would look out for specialized niche players. By segmenting markets, organizations can create their own ‘niche products’ and thus attract additional customer groups.
Moreover, a segmentation strategy that is based on customer loyalty offers the chance to attract new customers with starter products and to move these customers on to premium products.
4- Product Development
The process of using marketing segmentation starts before your products even enter the market as you develop qualities and features to meet the needs of the customers. Your offerings may start with a skill or interest of yours, such as creating clothing for plus-size women. But after you define this broad focus, the needs of your target market will, in turn, define the products and services you develop.
You may segment your primary market into subgroups, such as older and younger plus-size women, plus-size working women and athletic plus-size women. The better you understand the needs and interests of each of these groups, the better you’ll be able to create products they’ll specifically want to buy.