8.1 THE STRATEGIST IN YOU: Understanding Different Customer Needs

(SHORT NOTES FROM STRATEGY TOOLS:

christiaan-janssens.blogspot.com

Marketing Strategy at http://www.mindtools.com)

Market Segmentation

Marketing is much more than "promoting the right product, in the right place, at the right time."  It takes a lot of thought and understanding.  It also involves market segmentation that is the dividing up of potential market for a product into groups of that have similar needs, and then addressing these needs.

Market segments must always be distinct from each other and yet the people within each segment must be similar in relevant ways.  Market segments should also be:

·         Accessible – Can be reached through cost effective and practical communication and distribution channels

·         Measurable – Can estimate the size so that marketing spend can be allocated accordingly

·         Substantial – Is large and long-lasting enough to justify its own marketing activity

·         Viable –people can afford the product, see clearly and desire the advantages compared with other products and services

There are four common bases for market segmenting:

• Geographical
• Demographic
• Psychographic
• Behavioral

Market segmentation also involves splitting the target market into clusters of people likely to respond in a similar, positive way to the marketing mix presented to them.  The main ways of segmenting a consumer market are on the basis of geography, demography, psychographic factors and behavior.  Market segments should be accessible, measurable, substantial and viable.

Market segmentation aims to make marketing efforts more effective, and also help serve customers' needs better.  By applying its principles, can increase the likelihood that people will be interested in the product.