Market Segmentation is a process dividing a total market into groups, or segments consisting of people with relatively similar product needs. In dividing or segmenting markets, researchers typically look for common characteristics such as shared needs, common interests, similar lifestyles or even similar demographic profiles.
4 characteristics that build customer groups
If you are selling a product or service at first you need to establish wether or not there is potential to sell. Research is a great way to source information about your market as a result you will determine if your market is viable enough. Market segmentation is a customer information gathering process enabling you to build lists of customer groups based on similar characteristics. There are four human characteristics to analyse in a market, they include Demographic, Geographic, Psychographic and Behaviouristic. When you have established groups, you can begin implementing your marketing mix. If you would like to learn more about the marketing mix, click here.
Primary research is any and all information you collect yourself using techniques, such as interviews, questionnaires, surveys. On the contrary, secondary research, is information obtained using existing sources related to the industry or topic you are searching.
Benefits of segmentation
- Segmentation will allow you to target customer groups who are interested in your type of product or service in addition this should enable you to focus your marketing efforts on more productive and profitable market segments.
- Market Segmentation allows you to identify gaps in a market as a result giving you the jump on the opportunity to discover new customer groups.
Case study example
The key aspects discussed is a case study example of how customer grouping looks for a business. In addition you will see that I have clearly defined four customer groups for a fabricated, woman’s fitness studio.
- We have discovered ladies aged eighteen to twenty five who are more commonly described as social butterflies.
- Also, busy woman aged thirty to sixty five whom work full-time and require gym time to wind down.
- Individual woman who are hard-core gym junkies of all ages. These woman always seem to find time in the gym and are in great shape.
- Then, single mums aged twenty five to thirty five who are juggling being a full-time mum and looking after self.
In summary, the market segmentation process has provided me with the information needed to capture a greater market share.