Market segmentation is a process that allows companies to find homogeneous groups (all members have the same characteristics) in which lie potential buyers, better known as "target". In addition, it is a decisive element in a marketing plan, having a well defined target may establish guidelines to engage in an effective and persuasive communication.
What should be taken into account when making market segmentation?
It is commonly thought that market segmentation is nothing more than to identify the social, economic and cultural characteristics of your customers. However, there are other factors within the product and / or service that can greatly affect the purchase decision. If you want your market segmentation to be as close as possible to the reality it is important to consider the following factors:
1. Who can become your customer?
It is important to analyze the population and know the social environment that surrounds it. With the right variables you can discover many social and behavioral characteristics that are directly involved in the buying of your product or service.
The variables to consider are:
- Geographic: You have to ask yourself: Where is your target located? How can they obtain my product or service? Does my product or service can satisfy the need of a specific region?
- Demographic: These types of variables are the largest and have the most influence on a marketing plan. Among the demographic variables they are: age, sex, sexual orientation, educational level and socioeconomic status, etc.
- Psychographic: These variables describe the attitudes that your target might have to certain products, services and types of communication. Personality, lifestyle and interests are the clearest examples of psychographic variables.
- Behavioral: The pursuit of a profit, usage rate of the product, loyalty towards a brand. All of these measure what a customer looks for in a product and / or service.
Tip: To set values to each variable fast we recommend you imagine your ideal client and describe him/her in full detail. Do not let anything slip through, the more specific you are, the better you will know how to communicate with your target.
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2. Your product/service characteristics.
A Rolex is not the same as a Casio. Both brands belong to the same industry, but not to the same public. On the one hand Rolex is one of the most positioned brands in the market thanks to its price, features and the status of the people who buys them. Meanwhile, the Japanese company is responsible for manufacturing, among other products, accessible to all everyone. Both have spent years in the market and both approach their customers in different ways.
Depending on the features, price and availability of your product/service is how you should make your market segmentation. The most important variable to consider is the cost, it has to be competitive and provide the company with a good income. On many occasions it is the price what ensures the purchase. We're not suggesting you to charge less, just that you consider your customer’s possibilities and your competition, to prove that your company is the best option.
3. Where and how to obtain it?
There is nothing more frustrating to a consumer than failing to acquire what they were looking for. This creates disappointment and somehow the customer leaves with a negative impression of the brand. Now, thanks to new technologies many products are just a click away from the consumer ... as long as the buyer knows how to use new platforms such as e-Commerce.
It is your obligation as an entrepreneur to know the buying preferences of your ideal client. Does he like to go to stores or buy through online catalogs? Do they have the ability to pay with a credit card or they rather use cash?
As you can realize, there are many factors to consider for an effective market segmentation. But we assure you, that defining your target audience is the first step to a successful marketing strategy. In the comments, we’d love to hear what other variables important to you when defining a target?