Market segmentation strategy is one of the emerging trends in business. The process which entails subdivision of the consumer pool into smaller units based on a number of criteria has been found to have numerous advantages. The need for segmentation was realized following numerous challenges that were encountered in meeting the needs of a huge heterogeneous group of clients. Many businesses have turned to segmentation in a bid to improve their returns.
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 bears great influence on the market as well. Men and women demand different goods and respond differently to changes in the market. While women are more likely to be aware of changes in fashion, men tend to be more conservative. Women are also more regular shoppers than women world over. The business should therefore ensure that this is taken into account when designing various goods and services.
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.
Another form of subdivision is the use of product or brand loyalty. It is important to know which customers are loyal to products and which ones are not. At the same time, there is need to establish the degree of loyalty; some are not as loyal as others. By identifying the groups of customers who are loyal it is possible to identify ways in which to reward them and to retain them. For those who are not so loyal ways of improving the loyalty can be identified.
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 bears great influence on the market as well. Men and women demand different goods and respond differently to changes in the market. While women are more likely to be aware of changes in fashion, men tend to be more conservative. Women are also more regular shoppers than women world over. The business should therefore ensure that this is taken into account when designing various goods and services.
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.
Another form of subdivision is the use of product or brand loyalty. It is important to know which customers are loyal to products and which ones are not. At the same time, there is need to establish the degree of loyalty; some are not as loyal as others. By identifying the groups of customers who are loyal it is possible to identify ways in which to reward them and to retain them. For those who are not so loyal ways of improving the loyalty can be identified.
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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