Segmenting your market
When a business comes to us wanting a holistic marketing offering, market segmentation is always our recommended starting point. Segmenting your market, no matter what business or industry you’re in, is absolutely vital for business growth.
And there are multiple reasons why. Let’s examine what market segmentation means and why it’s more relevant to your business than you may think.
What’s market segmentation all about?
Segmentation is all about dividing a large market into subgroups. This helps identify your target audience and the different groups within this target audience that have similar characteristics.
Why market segment is relevant to your business
Segmentation is a tool that assists businesses of all sizes because it provides both a structure for all marketing initiatives and cohesion for all staff to understand your customers.
Market segmentation delivers the key benefits:
- Identification of new opportunities
- Highlights the group of customers who are of the highest value to your business
- A comprehensive profile of your audience allows for targeted communications to achieve maximum cut through
- You’ll be able to enhance your product / service offering by better understanding your customers needs
What’s involved in market segmentation?
The first step is to determine what market we’re segmenting. To do this we must understand businesses competencies, the brand and history as well as understanding the businesses vision and objectives.
We then must ensure we understand the dynamics of the market and segment customers according to needs, usage and value. We also look at the who, what, where, when & why reasons consumers use your product / service. By having a comprehensive picture of your customers we’ll be able to effectively deliver on their needs.
Once all the above is established a market map is created, which plots the different market segments. This clearly shows the opportunities available and which segments represents the best brand fit and business growth.
Having a deep understanding of your businesses market segmentation lets you create a real differentiation from competitors. This is something you’ll be able to build equity in over time.
Techniques to gather information for segmentation can include focus groups, direct interviews, observation, accompanied shops as well as third party sources and research.
What to do now we’ve segmented?
Remember segmentation will only benefit your business if you use it! Present it simply across your business and ensure the information is the foundation of all your marketing initiatives. Understanding your customer and their motivations will inform communication channels and messaging. Identifying unmet needs will also assist in product development.
Defining the market can be challenging but if done correctly it presents the greatest opportunity to identify untapped markets and facilitate growth.
If you need a hand segmenting your market give us a shout via firstname.lastname@example.org.