How Customer Segmentation Works?
If you want to attract the attention of your potential customer, it is a must that you understand how they would react to different marketing strategies. You have to gain an in-depth understanding of your market’s behavior. You would also need an idea about the things that would interest your market. This is where market segmentation would play a role in your marketing planning.
Market segmentation is not an easy task. It would require knowledge and expertise to properly identify the different segments of the market. However, no matter how complex a process may be, it would still follow a chronological procedure so it can produce a specific result. In this connection, here are the basic steps that every marketer has followed in order to segment the general market:
- Dividing the broad market into several segments relevant to the company. These segments must be measurable.
- Understand and measure each segment’s profitability.
- Determining the most likely profitable segment that the company can serve.
- Planning how to service, distribute, and market the company’s products and services to the market. This stage should cover the 4P’s of marketing: Product, Price, Place, and Promotion.
- Adequate allocation of resources for the defined plan.
- Implementing, measuring, and monitoring of the company’s performance before, during, and after implementation.
The steps provided above are not absolute. This means that you can insert other steps necessary so you can properly divide the general market into segments. It is important that you are able to come up with several segments that can serve the purpose of your company. Proper segmentation can help you target the right customers for your products, use your company resources efficiently and effectively, and keep up with market trends. With this, you are assured that your company is keeping up with competition, if not leading the market.
There are more advantages of market segmentation that a company can benefit from. With market segmentation, a company can determine which segment is more amenable for new products and services. A company can also come up with a marketing strategy customised to a specific market. In addition, in relation to resource allocation, a company can appropriately distribute its resources when it comes to distribution of products. And most importantly, segmentation would also help a company determine the price of the product more acceptable to its audience.
Continually providing satisfying the emotional needs of your customer should be your utmost objective when running a business. Therefore , it is a must that you know what makes your customer tick, what they want, and what they need. Every department that you have in your company should focus on satisfying your customers. With segmentation, you are one step closer to meeting your business goals and objectives.