Market Segmentation Strategy… by Design
Is there a business that wouldn’t benefit from using market segmentation?
I don’t think so.
Yet many managers try to function as though one of the basic rules of consumer behavior doesn’t apply. They assume everybody wants what they are selling. But you can’t make people buy something they don’t want. Pursuing everybody with equal vigor wastes money, yields poor results, and leaves the market open to competitors who do target their market segments.
This is why the world is full of marketing consultants and advertising agencies that use the language of market segmentation to attract clients. These ‘marketeers’ over sell to those who don’t have an easy path to developing a market segmentation strategy.
Whether it is done intentionally or not, every business appeals to certain market segments more than others. What is the most direct path to discovering what your effective market segmentation strategy is?
If you have a database that links customer addresses to sales data, it is a simple thing to:
1. stratify your customers in order of their importance to you
2. append household information that reveals/defines market segments
3. assess whether geography is a factor in your business
4. determine what your current effective market segmentation strategy is, even if it isn’t planned
5. identify the untapped potential of your current strategy and whether you want to stick with it or change it
Even in the modern era of one-to-one marketing through the web, the easiest path to understanding your current market segmentation strategy is to turn to direct marketing service providers with access to household level demographic data. Since the origin of direct marketing, targeting market segments has been their primary success factor, so they have efficient and precise methods to profile customers, assess market potential, and provide lists of best prospects.
A direct/database marketing agency can reveal effective market segments by analyzing your current customers faster and more cost effectively than any other marketing service provider. It’s painless. It’s economical. You can afford to have a deliberate market segmentation targeting strategy.
1) Marketing management by Philip Kotler – SlideShare
2) Market segmentation, targeting and positioning – Hanu