How Market Segmentation Helps Your Business Earn more
People of different age, gender and Characteristics have different needs and preferences. The same product may not be sold in the same way to all. This gives rise to the need for segmenting the market.
What is Market Segmentation??
Market segmentation is nothing but dividing the market into segments based on similar characteristics of potential consumers. The consumers are grouped based on the segment. After this, marketing strategies are framed in such a way for the different segments. By doing this the reach will be easy and the impact will be more. This is because people of the same segment respond to a particular strategy in more or less the same way. Hence market segmentation is very useful to tap markets. Here the efforts are made to tap the entire market rather than for tapping an individual customer. Hence it helps in cost reduction.
For example, if the market is segmented according to age, then strategies can be formulated to attract youngsters as a whole, for promoting usage of the latest innovative products like Bitcoin code. This is because young people are more tech-savvy and will be excited to learn about the automated trading robot.
Types of market segmentation:
There are four types of market segmentation. They are:
- Demographic Segmentation: Here segmenting the market is based on variables like age, income, nationality, religion, Nature of profession etc. For example, luxury cars can be marketed to tap the high-income
- Behavioral Segmentation: Here the market is segmented based on behavioral For example, young women prefer more trendy clothes. Hence a retailer selling fashion clothing can use marketing strategies in such a way to attract young women.
- Psychographic Segmentation: This type of segmentation is based on the lifestyle and interests of consumers. For example, ready-made food producers try to attract more office-goers in cities.
- Geographic Segmentation: It is nothing but dividing the market based on geographical area. For example, Air conditioners can be marketed easily in places where the weather condition is hot.
Uses of Market Segmentation:
The uses of market segmentation are:
- Identifying and prioritizing customers who would act in buying rather than taking vague marketing efforts in general. Thus segmentation reduces marketing cost and makes the expense more purposeful
- Matching the needs of the customer is made easy.
- It increases profit since it results in better sales and growth
Hence market segmentation will be very useful for improving the sales of your business and for reducing the marketing costs.