Introduction to Market Segmentation Process
Market Segmentation is the words itself that explain it is the segmentation or the segregation of market-based on different types, either type of customers or the type of products and many other factors. Market Segmentation is very helpful during market research. Market Segmentation helps in identifying different types of potential customer based on factors like homogeneity, distinctiveness, location or geography, trade or profession they are in, their social strata or status, etc. and allows the marketing team to plan their marketing strategies based on the type of customers and their choices and tastes. Also, these segments comprise of customers based on their similar interests, needs, and location or some commonalities among them. Market segmentation thus allows the marketers to manage and plan their marketing campaigns in a customized or personalized way as per the needs of the customer and their demands.
Importance of Market Segmentation Process
The importance of the Market Segmentation Process are as follows:
- Market segmentation eases campaign management and helps to strategize marketing plans for marketers. Thus market segmentation allows the marketers to customize their campaigns.
- Efficient market research and market segmentation help to save a lot of useful time, money and resources invested in the marketing campaign. Also as the customers are grouped as per their needs, commonalities, choices, statuses, etc. It becomes easy to target the audience for the marketers. Thus through market segmentation, the campaign management process is conducted very smoothly and efficiently in a cost-effective manner.
- The market segmentation helps to study the market needs and potential consumer, which reduces the risk of loss or unsuccessful marketing campaigns. As the market research is done in advance before the campaign, the chances of being successful are much more as the market segmentation helps the marketers do their homework for marketing. The marketers can strategize and plan their campaign as per the generic needs of the potential consumers as per the market research. In a nutshell, market segmentation is highly effective in increasing the rate of success.
- Market segmentation can be used to prioritise the consumer or the target audience and how it benefits the marketers. Market segmentation helps you study the potential of the consumer to buy a particular product, which is the cornerstone factor for successful marketing and allows the marketers to offer discounts and deals to attract the consumers’ attention towards the product.
- Narrowing the market and the target consumers help to save money and other targeted resources engaged in the marketing of the product or specific campaign, which is a very crucial thing for any company, firm or organization.
Types of Market Segmentation Process are as follows:
Behavioral market segmentation refers to the segmentation of the market based on the behaviour of the consumer interacting with the product like what they love to shop, or their occasion for shopping, travel plans, a budget of the consumer, etc. In a nutshell, behavioural segmentation is all about the attitude of the consumer towards the product and their buying process.
Division or segmentation of the market based on demographic factors like age, gender, nationality, marital status, family size, profession, etc. It helps narrow down the market and consumers based on their interest and potential to spend or purchase products.
As the name clearly indicates that the geographic segmentation refers to the bifurcation of the market based on the location or the geography where the target audience or consumers are located. Other factors included in the geographical segmentation may be climate, region, country, religion, language, and population.
Psychographic segmentation refers to the classification or the bifurcation of the market based on factors like consumer’s lifestyles, opinions, interests, views, attitude, social strata, personal habits and their fellows, pals.
Market Segmentation Process
Step-To-Step Guidelines for Market Segmentation Process are as follows:
1. Target Audience / Market and The Size of The Market
Identifying the market and the target audience is the foundation for any marketing campaign. It helps the marketers study the type of consumers included in the target audience section and set expectations according to their needs. It helps organize and plan their marketing strategies as per the size of the target audience’s market and taste.
2. Set Expectations for the Targeted Audience
Once the target audience and size of the targeted audience are identified, it is necessary to review the needs and requirements of the consumers to meet the demands and expectations of the consumers.
3. Distinguish the Categories and The Subcategories of Products
Based on the demographic factors of classification of the consumers, it is necessary for the marketers to subcategorize the products so that the products fit in the requirements for different age groups, different gender and so on.
4. Study or Research the Needs and Behavior of the Targeted Consumers
The marketing team must review the needs and preferences of the consumers from each section of society. It will also be easy to come up with a generic marketing strategy if the requirements of the consumers are studied and reviewed carefully.
5. Strategize the Marketing Campaign
Once the market research of all the necessary factors has been done, and the marketers have accumulated the consumer interest and their behavior, the marketing team, is all set to strategize their campaign for a particular product or service. Different advertisements and promotions, banners, etc., are included to promote the product or the service. The promotion should be done in such a way that it establishes a connection between the consumer and the product or the service as the connection is very important for the success of the campaign.
Market segmentation has been the cornerstone for all the successful brands in the market, whether the company/marketer was a product based company or a service provider company. For example, Redmi/Xiaomi has established itself as the most popular and highest-selling mobile phone brand in the market as they did their homework correct. They studied their consumers and their expectations and the sensitivity of the consumers towards the pricing of the phones. After reviewing the market carefully, they came with a successful launch and promotion of the product.
This is a guide to the Market Segmentation Process. Here we discuss the introduction and Types of the Market Segmentation Process along with Step-To-Step Guidelines for the Market Segmentation Process. You may also look at the following articles to learn more–