Describe Market Segmentation


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Targeting best prospects with market segmentation based on geography, behavior, demographics, and psychographics

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Describe Market Segmentation

  1. 1. Describe Market SegmentationChances are, your mass marketing efforts aren’t working as effectively as youwould like. It is likely that your marketing messages are reaching the wrongpeople, or worse, alienating your best prospects. While mass marketing allowsfor economies of scale to be realized through discounts on production,distribution, and communication, each customer’s needs and preferences willdiffer. The same offering will not be viewed by each customer in the same way.Market segmentation can help with this. By targeting your best prospects and bytailoring your message to particular subsets of your market, you become morelikely to convert more prospects into customers. By understanding the diversityof your customers, you can target your message with unique offerings for eachsubset, allowing you to get a higher volume of paying customers. In this article,I’ll describe market segmentation and how you can segment your market formaximum effectiveness today.So how do you know what constitutes a market segment? Each segment of yourmarket can be defined by any number of categories, and each will have differentneeds and preferences. Each market segment should have measurableidentifying attributes, unique needs to justify separate offerings, and should besufficiently large and stable to justify using resources to cater to them.Additionally they must be reachable through existing communication anddistribution channels.Here are a few of the most common bases for segmenting consumer markets:geographic, demographic, psychographic, and behavioral.GeographicDepending on your product, a good place to start when segmenting your marketis by region, whether it is country, state, county, or even individualneighborhood. You can conduct segmentation by population or populationdensity. Are you targeting a very large city or a rural farming community? Youcan even segment by climate, depending on your product. For example, is ismuch harder to sell umbrellas in Tucson than it is in Seattle.MindEcology
  2. 2. DemographicDemographic variables range far and wide, and typically have a few standardvalues. For example, gender can be expressed as male or female. Generation canbe assigned the value of baby-boomer, Generation X, Generation Y, and so on.You can segment demographically by age, gender, family size, family lifecycle,generation, income, occupation, education, ethnicity, language preference, andreligion… As you can see, the list goes on and on. In fact, demographicsegmentation probably offers the widest variety of segmentation variables thanany other technique.PsychographicPsychographic segmentation refers to a person’s choice of lifestyle and generalattitudes toward life and the world. Activities, interests, opinions, attitudes andvalues are all variables that shape a person’s psychographic makeup.BehavioralFinally, behavioral segmentation is based on your customers’ actual behaviortowards buying and using your products. Behavioral segmentation hinges uponkey customer buying behaviors such as frequency of purchase, ticket (order)dollar amount, recency of purchase, and product mix.Usually, the best segmentation employs a combination of each of these factors.Contact MindEcology today to get started.MindEcology