Market Segmentation

I had no idea so many blog posts would be necessary for my degree but I'm glad that I'm a veteran blogger as this is a snap to do! In this assignment I'm defining market segmentation. Market segmentation is how groups of people are defined in order to market to them more effectively.

This can be geographically, gender, race, by income, psychographically and more. For instance if you had a fresh out of high school kid with their first job in retail earning maybe ten dollars an hour, chances are they don't own a house yet. Maybe they own a hand me down car but it's on it's last legs and needs costly repairs and it's more cost effective to buy a new used car in which you will have a better asset.

They go to the car lot and see this kid and what they drive and likely will not market a high end vehicle to them that they can't afford, so they'll ask such questions as what's your income. Do you own or rent, How many incomes are in the house. Do they have any down payment money, questions like this to gauge what they should be showing the new client.

They probably can determine pretty quickly what someone can afford by just a few questions, this is segmentation. Essentially they are asking for a verbal survey. A survey is a great tool to determine how your product can be marketed. You can find out who is interested in your product, what do they like or dislike about your product, is the price high or low, and with a survey you can start to gauge which segments your product can appeal to and how to broaden that appeal to a larger audience. A survey can be done pre-purchase or post-purchase making it a very valuable tool!

Another great tool to help is to develop a target consumer profile. This tool goes from the basis that your consumers have things in common. Whether it's geography, income levels, genders, or perhaps belief systems there is something that prompts your consumers to buy your product. When you determine who your average consumer is with a consumer profile you will be able to market your goods or service much more effectively.

Both are very effective when it comes to finding the sweet spot for your marketing campaigns!