Mass marketing has been with us for several decades if not centuries. This method is a fairly simple method of advertisement but has the major disadvantage of lacking specific targets. It focuses on the entire population hoping that the consumers will be reached. As a result, specific concerns about goods and services are not adequately addressed. In view of this fact, many advertisers are now turning to another option, market segmentation strategy.
There are many ways in which the market can be subdivided. These will be largely determined by the nature of market and the type of product that is being sold. Existing commercial laws also have some influence on the type of approach that can be adopted. Once this has been done, the product can be modified to meet the needs of various segments. This is also known as product differentiation.
When preparing the various segments, there are a number of conditions that have to be met. Each of them must be large enough to produce a sizeable amount of profit. This profit should take care of the administration costs that are attributable to the specific segment. There must be homogeneity within the group as this has a huge influence on decision making.
Stability of a segment is very important. There is no need of creating a segment that will either disappear or reduce suddenly in size. Properly created segments give the marketer time to advertise their products and to start receiving returns. Choosing segments, therefore, calls for careful selection of the criteria to be used.
There are a number of consumer characteristics that used for creation of segments. Geographical location of the targeted consumers is one of the commonest attributes that can be used. It entails the breakdown of the large pool of customers based on their country, city or even state of origin. By creating consumer profiles based on this data, decisions regarding service provision and product production are made.
Behavioral segmentation refers to the creation of consumer groups depending on their degree of knowledge of different products or services. It also takes into account their attitudes towards the various products or services. A significant number of consumers will buy goods or services because of certain prevailing conditions. This is popularly referred to as occasional buying. The producer and marketer need to be aware of the existence of such groups and ensure that they avail the required products at the appropriate times. For instance, they need to provide gifts for Christians during Easter and Christmas.
Psychographic segmentation is another popular method among advertisers. In this approach, the market will be subdivided based on the demographic and psychological characteristics of the consumer pool. To achieve this, attributes such as social classes, personal values and beliefs and lifestyle have to be taken into account.
The most important thing to know is that market segmentation strategy may use virtually any form of attribute to create the groups and subgroups. Obvious differences like gender, income and age can be used almost anywhere. When a preexisting variable is used to create the segments, this is known as priori segmentation. When the variables are determined through research, it is known as post-hoc.
There are many ways in which the market can be subdivided. These will be largely determined by the nature of market and the type of product that is being sold. Existing commercial laws also have some influence on the type of approach that can be adopted. Once this has been done, the product can be modified to meet the needs of various segments. This is also known as product differentiation.
When preparing the various segments, there are a number of conditions that have to be met. Each of them must be large enough to produce a sizeable amount of profit. This profit should take care of the administration costs that are attributable to the specific segment. There must be homogeneity within the group as this has a huge influence on decision making.
Stability of a segment is very important. There is no need of creating a segment that will either disappear or reduce suddenly in size. Properly created segments give the marketer time to advertise their products and to start receiving returns. Choosing segments, therefore, calls for careful selection of the criteria to be used.
There are a number of consumer characteristics that used for creation of segments. Geographical location of the targeted consumers is one of the commonest attributes that can be used. It entails the breakdown of the large pool of customers based on their country, city or even state of origin. By creating consumer profiles based on this data, decisions regarding service provision and product production are made.
Behavioral segmentation refers to the creation of consumer groups depending on their degree of knowledge of different products or services. It also takes into account their attitudes towards the various products or services. A significant number of consumers will buy goods or services because of certain prevailing conditions. This is popularly referred to as occasional buying. The producer and marketer need to be aware of the existence of such groups and ensure that they avail the required products at the appropriate times. For instance, they need to provide gifts for Christians during Easter and Christmas.
Psychographic segmentation is another popular method among advertisers. In this approach, the market will be subdivided based on the demographic and psychological characteristics of the consumer pool. To achieve this, attributes such as social classes, personal values and beliefs and lifestyle have to be taken into account.
The most important thing to know is that market segmentation strategy may use virtually any form of attribute to create the groups and subgroups. Obvious differences like gender, income and age can be used almost anywhere. When a preexisting variable is used to create the segments, this is known as priori segmentation. When the variables are determined through research, it is known as post-hoc.
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