Divide and Conquer with Market Segmentation & Target Marketing

market segmentation & Target Marketing

Market Segmentation & Target Marketing

With over 6.7 billion people in the world, it’s nearly impossible to satisfy everyone with a single marketing mix strategy. With the exception of unbranded, plain labeled package goods that are aimed at the mass market, a marketing strategy that attempts to satisfy everyone is destined to fail.

Many years ago soap manufactures determined the need for special marketing strategies to target individual markets. For example, Dove targets soft skin and Irish Spring promotes extra sex appeal. Therefore, capturing large portions of the market often require that firms use market segmentation strategies and develop custom marketing mix strategies to target market each segment.

What is Market Segmentation?

Market segmentation is the process of dividing the total market into several homogeneous groups. By adjusting a marketing mix strategy for a specific market segment, companies can focus on satisfying the needs of specific portions of the target market.

THE MARKETING ANALYSTS use advanced multivariate statistical analysis to segment markets. Often, our segmentation techniques will combine demographic, psychographic, geographic and perceived product benefit data to identify homogeneous customer groups. By doing so, we provide marketers with better information to target, attract and capitalize on similarities within a segment.

5 thoughts on “Divide and Conquer with Market Segmentation & Target Marketing

  1. Its a great discussio. We use it to a great length in Retail Banking.I would like to see some innovative models around Segmentation.
    Regards,
    Mohammed A.Alam
    alamjeddah@gmail.com

  2. Please tell me a little more about what you would like to see and I will gladly write a blog entry. Banking models usually deal with neural networks, profiling and prediction. We use similar models to identify customers who are at risk of churning.

  3. I am in cancer diagnostics. The specific segment we play in is tissue diagnostics, an area wich is limited to 5 players (of which we are by far the smallest) which provide both reagents (the razor blade) and instrumentation (the razor). There is also a second tier of 5 to 8 significant “reagent only” providers.
    We currently segment our customers very simply: !. Customers that want full automation (which we cannot yet provide). These customers make up at least 50% of the market, and generally have a lower level of expertise, thus are willing to be locked into expensive closed systems; 2. Customers that want semi-autoation and greater flexibility (our best market). 3. Customers that do not use instrumentation at all (small percentage of the total; includes most labs in third world countries)
    Within each group, we segment by customers that are happy or frustrated with their current vendor (because the largest 2 of our major competitors are experiencing severe problems in this area as a result of their non-customer-friendly business model).
    How could we do a better job of segmenting our customers so that we can grow faster by targeting the right customers, and more effectively direct our new product development efforts?

  4. The discussion id informative and I am able to understand and appreciate your approach for CPG goods, is it possible to use this approach for Education Services. Following is a case in point;
    We are currenly working with some Universities to help them increase their International student intake. For this we take up the different countries which send the highest number of students to our host University (and the host country). Now the host Universtity has to prepare a marketing program for each country which they are targetting. There is a huge competition as you would understant the University is not only competing with other unversities from its own country but also with universities from other countries who are also trying to lure the same set of students. The first level of segmentation is obviously the country of origin of the students. But the next level of segmentation is required to form homogenous groups of students within each country of student origin. In this case it becomes very important to segment the students on the basis of their needs for international education and prepare a more targeted marketing plan.
    Please suggest how market segmentation and target marketing can be effectively used in this case.

    Regards,
    Ritu

  5. Hello Ritu,

    Thank you for joining our discussion. I am writing an article about this now and should have something up later in the day.

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