Table of Contents
What is Market Segmentation, Types, and Benefits
Let us begin by understanding what is Market segmentation? Market segmentation is the process of diving the market into smaller groups of people who have the same taste or preferences or interests. It’s a process where you pick those customers from the market that have similarities between them and are different from the rest of the market. There can be too many different market segments, according to your need.
Why is Market Segmentation Important?
It is not possible for every person out there in the market to be your potential customer or your target audience. The market is huge and hence you need to market your products and limit your reach only to those who would be interested in buying your product.
Let us take an example, Imagine your product is men’s clothing wear, now it would be pointless to market this product to females or children’s or teenagers, your audience should be specific, targeted, and segmented. This is why Market segmentation is important before planning out your strategies.
Types of Market Segmentation
As the name hints, geographic segmentation is dividing the target according to the various locations or regions which are out there. There are further classifications such as city, countries, postal codes, etc. Geographic segmentation is helpful while looking for marketing campaigns at different locations and target audience. However, your marketing techniques would also change according to the different regions and the language.
Psychographic segmentation can be described as looking out for the individual’s or a group’s interests, preferences, choices. It basically focuses on the traits and changing preferences. One of the important aspects of Psychographic segmentation is that it can help you figure out your consumer’s influence over why they buy or do not buy a particular product.
Demographic segmentation is the most common and known method of market segmentation, which focuses on the various differences. Such as differences in age, income, education, sex, marital status, etc. One of the benefits of using this method is that it is very easily accessible.
Behavioral segmentation gives you an insight into the various changing behavior of your audience. Their behavior about purchasing products online, their loyalty, the rate of return, etc. This segmentation helps in setting up a behavioral pattern.
Benefits of Market Segmentation
This advantage was quite obvious. As it is the basic role of Market segmentation to grant you a targeted audience for your marketing campaign or strategy. Imagine a full-fledged marketing campaign receiving very less response from the expected results? It is because the campaign failed to reach their targeted audience, instead, it was promoted to everyone out there, which resulted in less results. The major benefit is marketing to your targeted, specified audience.
Drawbacks of your product
Market segmentation, with narrowing your approach would also explain about any drawbacks which is being faced while marketing your product. Not every product is perfect, sometimes there are drawbacks or some area where you might fail and Market segmentation can help your figure out on the same.
Development and Focus
Market segmentation also helps to uncover the various flaws of your products or the various areas where your product is not performing well, hence it can help you to take various product development decisions, as the demands and preferences of consumers keep on changing and it is important to stand out and keep your product updated as per the market. It also helps to narrow down your focus to a specific audience.
Effective Marketing strategies
If your target audience is clear to you, you can plan an effective marketing strategy or a campaign, and market segmentation would increase the chances of the campaign being successful. It would give you a clear vision of your audience or your target, which can help you to develop your strategy accordingly, by just focusing on a particular group. An effective marketing campaign means an effective return on investment and ultimately, good sales.
So by now, we have realised the significance of Market segmentation. The various types of market segmentation and how it can be used in our favor, according to the various business types. The various advantages of Market segmentation make it clear how a planned marketing campaign can outer-perform over an ordinary campaign.