on business | What You Must Know About Market Segmentation

What You Must Know About Market Segmentation

One of the problems that small businesses usually have is the lack of customers or the difficulty in getting them. Given this situation, the best option to get customers is to define your target and find as much information as possible for its members to segment the market.

 

What does this mean?

Market segmentation means dividing a market into small groups that have similar characteristics and needs. It can be carried out taking into account the characteristics that can influence the buying behavior of consumers. You can segment your audience based on different variables, such as age, sex, geographic location, training, lifestyle or interests.

 

Why you need market segmentation? 

The positioning of your business in the market should make it easier for you to know the characteristics or aspects that define your customers.

 

Importance of market segmentation

As we have already analyzed, market segmentation is essential for permanent efficiency and benefits. With this segmentation, it is possible to focus the investment and serve a small group, but in an efficient and objective way to our product. In addition, sales are more effective because you have the opportunity to design and improve campaigns and strategies according to the consumer or the customer, all this makes the market segmentation vital for the optimal functioning of an organization's marketing.

 

Here are a series of tips for your SME to define its target audience:

1) Do a study to detect what are the characteristics that your target audience has. To identify them, you can carry out a study in a small sample, through interviews, surveys, analyzing the competition or, even, through social networks.

 

2) Analysis. When you have the results of the study, it is time to analyze them, in order to group and discover the characteristics of the customer segment that have the same interests, or find the group of customers that differ from the rest based on a specific variable. You must also extract specific profiles based on variables such as attitudes, behaviors or demography, among other highlights.

 

Benefits of market segmentation

1) Focus your actions and campaigns towards a specific audience. The fact that will allow you to focus all your efforts and resources in a certain niche market.

2) Know perfectly what your audience is looking for and needs. In this way, you will be able to offer specific and customized solutions to your problems and needs.

3) Customize your messages and the tone you will use to communicate. You will be able to carry out marketing, communication and advertising strategies with a personalized message.

4) Improve the results of your company or business. If you focus on your market segment, you will optimize your results, data and figures.

 

Some types of market segmentation

As we have seen, you can group your audience based on different profiles. Let's see now which are the most common:

B2C Business-to-Consumer

  • Geotargeting. You can position yourself in a niche market based on its location or area of ​​activity. You can do it by regions, cities or municipalities.
  • Demographic segmentation. It is usually the most common type since it is the one that provides the most results and is easy to quantify. Some variables to consider are sex, race, life cycle, volume of income, profession or labor sector.
  • Socioeconomic and cultural segmentation. Like the previous ones, it is very common and simple to perform. For its implementation, variables such as social class (low, low-medium, medium, medium-high, high), the behavior of ethnic, religious and cultural groups, level of education, profession, education are taken into account, employment status, income level and available income margin after covering basic needs.

 

B2B Business-to-business

As in the previous segmentation work, it is very important to take into account the data related to finance, services, product compliance, sales interaction and marketing campaigns. This information can shed light on what the path that should be taken in the segmentation of a B2B relationship between businesses should be. The following must be taken into account:

  • Antiquity. Know and be very clear since when that company has been a client of our business and what is the regularity of demand for services.
  • Recent activity. In relation to the exact time that has passed since you made the last purchase of any of your products.
  • Revenue. Taking into account the total economic level reported by the client in question.
  • Geography. Be aware of the specific location of the client and if it is geographically dispersed.
  • Use of products and services. To know what the customer is making of the products and services in your catalog in which he has placed his trust.

 

Examples of market segmentation

Some examples to better understand market segmentation and how companies use it are as follows.

 

Case 1

A company that makes tools for adventurers who love nature needs to carry out an advertising campaign. For this, the marketers of the company need to focus their merchandise to these fans (behavioral variables) through market segmentation. For their advertising to be effective, they seek to focus on this segmented market, which corresponds to the characteristics of the adventurers and carry out media campaigns related to the topic, such as an adventure magazine.

 

Case 2

A company of hygienic products launches a product especially for women, in this way it is segmenting its market with a demographic variable (sex). The company in question must adapt its marketing strategies to such market segmentation.