It’s that time of year again: time for cooking the Christmas feast. But first you need to decide what you want to cook: Turkey or ham? Cornbread stuffing or broccoli casserole? Pumpkin pie or apple crisp? Then you must make a plan and organize your tasks. Everything can’t be cooked at once, or in the same way. Those that cook at the same temperature can be in the oven together. But don’t forget to set your timer – you don’t need anything burning.
Defining your target market and segmenting it are just like cooking your feast. You must first determine who your target market is. Who do you want your marketing team to focus on? Once you have this firmly defined, you then need to segment your target market to determine the best marketing plans to implement.
Market segmentation is a way of narrowing a broad target market into groups of consumers with like needs and goals to whom you can more efficiently market your business. Successful segmentation should abide by certain criteria. Each group should be:
- Identifiable and measurable – By age, sex, employment, income, education, location, or any other distinction.
- Large enough to be profitable – If your market segments are too narrow, you may risk ignoring potential customers and losing their business altogether.
- Reached effectively – The members of each group should have similar interests: where they shop, television shows they watch, products they consume.
- Responsive to marketing – Your product must fill the group’s needs in some way that sets them apart from the other segments.
- Stable and not expected to change quickly – If their needs and/or goals change, or a strong competitor becomes available and you are unable to maintain your customer base, you’ll have to start over.
Let’s say, for example, your product is a waffle iron. Your target market would be those who cook and those who (want to) consume waffles. But your marketing strategy for a stay-at-home-parent would be different than the one directed at a young bachelor.
Without market segmentation, you would use a mass marketing strategy. This assumes all consumers not only have the same needs, but also respond to the same marketing technique. With this strategy you may reach the maximum number of consumers, but there is a higher likelihood that the majority of them won’t buy into what you’re selling.
Benefits of market segmentation:
- Encourages development of new market strategies.
- Helps form efficient marketing campaigns that effectively reach your target market
- Communication with loyal customers leads to product improvement
- Improves customer satisfaction
- Could lead to discovery of more applications for your product
- Locates niche markets your competitors may be overlooking
- Reduces waste of time and resources directed toward those outside your target market
One other thing to consider, especially for small businesses, is expense. You may spend a bit more time and money researching to properly divide the groups and to develop the best marketing strategy for each segment. But ideally the end result will be more profitable.
Just as you need to know what foods you’re going to prepare before you create your cooking plan, segmenting your target market is key to developing the proper marketing strategies. Segment properly, and you’ll see your marketing efforts go farther, faster.