How To: Marketing Segmentation


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Everything you need to know about marketing segmentation, from the marketing experts at Adashmore Creative. This presentation helps you figure out where to start, factors to consider, best practices, and how to use segments to your advantage.

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How To: Marketing Segmentation

  2. 2. WHERE TO START What you need to know
  3. 3. BEFORE TRYING TO SEGMENT  Conduct a solid SWOT analysis  Strengths  Weaknesses  Opportunities  Threats  Conduct a STEP analysis  Social  Technological  Economic  Political
  4. 4. BEFORE TRYING TO SEGMENT  Know your market opportunities Present Projects Present Markets New Markets New Products Market Penetration Product Development Market Development Diversification
  5. 5. QUESTIONS TO ASK YOURSELF  What should be evaluated first?  More profitable to retain customers than find new ones  Markets close to home are more familiar, easier to respond to
  6. 6. WHAT IS A MARKET  A group of potential customers who have similar needs and are willing to purchase goods or services to satisfy those needs.  Generic market: a market of customers with generally similar needs.  Example: Transportation Marketing for City – buses, trains, cards, bicycles, walking, and all methods for getting around town  Product market: market of customers with similar needs  Example: Laptop Computer Purchasers – Microsoft, Dell, Apple, Fujitsu, etc.
  7. 7. FOUR ASPECTS OF A PRODUCT MARKET  What: Product Type  To Meet: Customer needs  Who: Customer segments  Where: Geographic region Example: Marketing advisory services for mid -sized enterprises in North America with limited budgets Now to segment further…
  8. 8. HOW DO YOU SEGMENT? Factors to consider
  9. 9. CRITERIA FOR SEGMENTATION: DEMOGRAPHIC B2B Annual revenue # Employees Industry # Locations Years in business Markets served Products/services Job title Level of experience/seniority B2C Age Income Marital status Education Family Size Gender Geographic location Social status Occupation
  10. 10. CRITERIA FOR SEGMENTATION: PSYCHOGRAPHIC B2B Resistance to Change Diversification oriented Open minded/rigid Decision making process Early adopter/follower Growth oriented/static Technology sophistication Professionalism Require referrals Awareness of competitors Risk aversion Loyalty Market/Product Focus B2C Brand preferences Price sensitivity Conservative/Liberal Enviro-friendly Hobbies Lifestyle Information sources Service preferences Buy based on trends Spontaneity Influenced by peers Relationship importance
  11. 11. CRITERIA FOR SEGMENTATION: BEHAVIORAL B2B Website visits Responses to marketing Purchasing methods Association memberships Internet usage Social media groups Collateral views/downloads B2C Purchase history Where they shop Type of store preference Association memberships Internet usage Impulsiveness
  12. 12. CRITERIA FOR SEGMENTATION: ENVIRONMENTAL B2B Technology landscape Purchasing power Management practices Purchasing process Business culture B2C Country of residence Political climate Currency Payment methods Shipping & receiving Languages spoken
  13. 13. BEST PRACTICES Two step process
  14. 14. DETERMINING VIABILIT Y  Size: Is it large enough to pursue?  Expected Growth: Small markets may be OK if there is room to grow  Competitive Position: low competition is an attractive market  Cost to reach: is this market accessible with your tactics?  Compatibility: how aligned is this market to our goals?
  15. 15. FIRST STEP OF SEGMENTATION Name broad and minor criteria Market Segmentation Criteria 1 Minor 2 Minor 1 Minor 3 Market Segmentation Criteria 2 Minor 1 Minor 2 Minor 3
  16. 16. SAMPLE: SIZING Total Size: 2,429,133 5-100M Revenue 0-5M Revenue Canada 2,496 184,953 73,895 US International Markets 100M+ Revenue 29,054 1,204,493 784,960 Australia Company Size (Revenue) 1,495 78,395 69,392
  17. 17. SAMPLE: SEGMENTS Total Size: 2,429,133 Company Size (Revenue) Canada US Australia International Markets 100M+ Revenue 5-100M Revenue North America Corporate: 1,420,996 mid-sized and large corporations in USA & Canada Australia Corporate: 79,890 mid-sized and large corporations in Australia 0-5M Revenue Small business: 928,247 small businesses in USA, Canada & Australia
  18. 18. POSITIONING AND COMPETITIVE DIFFERENTIATION How to use segments to your advantage
  19. 19. WEIGHTING SEGMENTS  Competitiveness  Ability to differentiate  Competitive Intensity  Barriers to entry  Market Opportunities  Market size  Growth rate  Profitability  Attractiveness  Strategic & technical fit  Capabilities  Maturity and timing
  20. 20. NEXT STEPS  Should you focus on some segments more than others?  What are you trying to accomplish?  Analyze the target market to identify where competitors are positioned. How does your product compare?  Which attributes are most important to customers?  How can you reach these people?