Market Segmentation: A Channelized Technique of Consumer Target in Marketing

Introduction Market Segmentation and Targeting?

Market segmentation and targeting is the process of identifying an organization’s potential consumers, choosing the consumers to pursue and create value for the targeted customers as well. This in general is achieved by means of segmentation, targeting and lastly positioning (STP) process. With the help of market segmentation and targeting firms can determine as well as acquire key consumers. Consumers can put into segments on the basis of location, demographics and lastly lifestyle. Another way to segment out customers is by asking the who, what and why questions. Segmentation and targeting impact pricing, customer management and lastly pricing strategy of a company. Using market segmentation, companies may usually adopt a specific strategy that is termed as target marketing. This strategy involves dividing the market into various segments and developing products as per their individual needs. Targeting refers to the process of evaluating the attractiveness of the customer segments and then determining how to attract them. An organization’s choice of customer segment is dependent on the products and services that are being offered. This as well also determines the marketing strategy that will be employed by the company. Markets all of that are undifferentiated are said to be suitable for mass marketing. For instance, large firms including Microsoft will be able to make use of the same design and similar advertisements for all consumers. For other markets, one-to-one marketing seems to be more appropriate. One example is that of Dairy Queen, where the consumers can design as well as create their own cake. Three factors that impact company’s selection of different segments include characteristic of the segment, competencies and resources that are needed to address the needs of the segments and lastly competition in the segment.

How to use Segmentation, Targeting, and Positioning (STP) to develop marketing strategies

STP Marketing Model will be of much help to analyze the product offering and the way you communicate the benefits and value to specific groups. STP is for segment the market, target the best customers and then position the offering. The model is very much useful as it helps the firms to identify the most valuable types of customer and thereafter develop products and marketing messages tailored to them. This is something which allows one to get engaged with each of the target groups in a more effective way. Personalizing messaging and ultimately increasing the sales is what needs to be done. The model is much useful as it helps one to identify the most valuable types of customer and then develop products highly tailored to this.

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Importance of Market Segmentation

Market segmentation is something that allows organizations to target the content to the right people in the right way. This saves organizations from targeting entire audience with a generic message. It is of much help to increase the chances of people engaging with the advertisement or content, thus resulting in more efficient campaigns and improvised return on investment (ROI). This will help out organizations to bring an increase in the chances of people engaging with advertisements or content.

What are the 5 methods of market segmentation?

5 different methods of market segmentation are as given below:

1. Demographic segmentation- This is one of the most of the common forms. This is about splitting up audiences on the basis of observable and people-based differences. The differences being talked about are age, marital status, size of family, level of education, income, nationality and religion. Demographic segmentation is certainly the most common form of segmentation.
2. Behavioral segmentation- Market can also be segmented on the basis of consumers’ behavior mainly the product. Dividing the audience on the basis of behaviors they display is something that will allow to develop messaging that caters to those behaviors. Some examples of behavioral segmentation are online shopping, actions that are taken on a website, benefits sought, rate of usage and loyalty.
3. Geographic segmentation- This refers to the splitting up of market on the basis of their location. This can be said to be as highly useful segmentation strategy. On the basis of the location of a customer, an organization can better understand their needs.
4. Psychographic segmentation- This is similar to demographic segmentation as it deals with characteristics that are more mental and emotional. These are certainly those attributes that are not easy to observe as demographics.
5. Value segmentation- Some of the businesses split up their market on the basis of transactional worth of their consumers.

Benefits of Market Segmentation

There are many benefits of market segmentation such as:

1. Improvisation of campaign performance- Market segmentation will help bring in improve in performance of marketing campaigns by helping out to target the right people.
2. Informs product development- With market segmentation, companies can develop products that better meet the needs of the consumers. Products can be created to appeal to the needs of the main market segment.
3. Reveals areas to expand- This will help identify audience segments which are not currently reaching with their marketing efforts.
4. Improves the focus of business- With establishment of better focus, businesses will be able to establish a brand identity.

Why Market Segmentation called as A Channelized Technique Of Consumer Target In Marketing

Market Segmentation is termed as a channelized technique of consumer target in marketing because using this it can be ensured that right people are targeted. Developing a generic content does not lead the company anywhere and thus it can be said that market segmentation is a channelized technique of customer target in the context of marketing. Customers need to be targeted so that the products can be developed accordingly. There has to be some considerations done in the context of market segmentation as that is most important when developing products. The design of the products should be tailored to the needs of the customers. Market segmentation provides companies the idea as to how they should proceed with the products and services. The products can be modified accordingly and the reach of the company enhanced.