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.
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.
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.
5 different methods of market segmentation are as given below:
There are many benefits of market segmentation such as:
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.
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