Market segmentation strategy is a way of dividing a large market into smaller units. The units share among them some common characteristics. The use of this strategy is a growing trend that has been continually adopted by many business entities. By creating these segments, it is easier to address the specific needs of each consumer or group of consumers. In the end the consumer is happy and the returns are higher for the business.
The process of creating subunits is preceded by research. This is done in a bid to identify the specific needs of consumers and how these needs can be solved. Depending on the size of the market, the research may take days, weeks or months. The research also helps in determining the criteria that will be used in creating the required segments.
There are many ways that can be used to identify the required segments. These include the use of face to face interviews, questionnaires, telephone interviews and email surveys among others. The interviews are structured in a way that will help gather information on their bio data, their geographical location, and tastes and preferences. Customers who respond in a similar way are usually classified together since they are likely to be faced with the same challenges.
There are numerous criteria that can be used when segmenting. Commonly used characteristics include age, gender, consumer tastes and preferences and geographical location. Differences in age affect the type of goods that are demanded and it is important that a business appreciates this. The elderly tend to be rather resistant to change while the young are more likely to embrace changes in products and service delivery.
Gender has always exerted great influence on demand and supply for goods and services. Men and women have tastes and preferences that widely vary. For instance, women are more aware of changes that take place in fashion and are more likely to conform. They also shop more regularly than their male counterparts. Having this information is very important for the producer.
Behaviour segmentation is one of the types of segmenting that exist. This criterion can be used for almost any type of good or service. Seasonal buying is a fairly common behaviour among customers. The demand for certain goods varies with seasons. For instance the demand for Christian gifts increases around the times of Easter and Christmas. If the producer knows this, they will make the necessary adjustments in production.
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.
The process of creating subunits is preceded by research. This is done in a bid to identify the specific needs of consumers and how these needs can be solved. Depending on the size of the market, the research may take days, weeks or months. The research also helps in determining the criteria that will be used in creating the required segments.
There are many ways that can be used to identify the required segments. These include the use of face to face interviews, questionnaires, telephone interviews and email surveys among others. The interviews are structured in a way that will help gather information on their bio data, their geographical location, and tastes and preferences. Customers who respond in a similar way are usually classified together since they are likely to be faced with the same challenges.
There are numerous criteria that can be used when segmenting. Commonly used characteristics include age, gender, consumer tastes and preferences and geographical location. Differences in age affect the type of goods that are demanded and it is important that a business appreciates this. The elderly tend to be rather resistant to change while the young are more likely to embrace changes in products and service delivery.
Gender has always exerted great influence on demand and supply for goods and services. Men and women have tastes and preferences that widely vary. For instance, women are more aware of changes that take place in fashion and are more likely to conform. They also shop more regularly than their male counterparts. Having this information is very important for the producer.
Behaviour segmentation is one of the types of segmenting that exist. This criterion can be used for almost any type of good or service. Seasonal buying is a fairly common behaviour among customers. The demand for certain goods varies with seasons. For instance the demand for Christian gifts increases around the times of Easter and Christmas. If the producer knows this, they will make the necessary adjustments in production.
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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