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By Eugenia Dickerson


Market segmentation strategy represents a major shift from the traditional ways of doing ways. It is a process of subdividing markets into smaller units that share some characteristics. This approach has been established to bear numerous advantages. The need to create segments has help tackle most of the problems that were encountered with the traditional business models. Many business entities have readily embraced the strategy.

It is important to conduct research that will guide the process. Such research helps in the identification of the problems affecting the specific groups of consumers. It also comes up with ways of solving the identified problems. At the same time, the criteria that will be used in creating the segments are determined. This research may last days, weeks or months depending on the size of market.

Research can be conducted in various ways so as to create the segments. This may be done through telephone interviews, face-to-face interviews, email surveys and questionnaires. The research tools are created in a way that will help collect information such as personal information including, geographical location, tastes and preferences and bio data. Customers that give similar responses are placed into the same groups.

There are several criteria that can be used in the creation of segments. The most commonly used characteristics include gender, age, tastes and geographical location. The difference is age is an important determinant of demand for goods and services. In general, the elderly tend to be conservative while the young are more likely to accept changes. When producing goods and services it is important to have this in mind.

Gender has always exerted great influence on demand and supply for goods and services. Men and women have tastes and preferences that widely vary. For instance, women are more aware of changes that take place in fashion and are more likely to conform. They also shop more regularly than their male counterparts. Having this information is very important for the producer.

Seasonality in demand is a form of behaviour segmentation that is fairly common and affects a variety of goods and services. The demand for certain goods increases during certain seasons and decreases thereafter. If the producer has this information, then they will make sure that the goods in question are produced at the required time and adjust downwards later to avoid unnecessary losses.

Another form of subdivision is the use of product or brand loyalty. It is important to know which customers are loyal to products and which ones are not. At the same time, there is need to establish the degree of loyalty; some are not as loyal as others. By identifying the groups of customers who are loyal it is possible to identify ways in which to reward them and to retain them. For those who are not so loyal ways of improving the loyalty can be identified.

Market segmentation strategy is a way of ensuring that demands of customers are met. It is a process that helps the business to identify the preferences of different consumer groups and how to meet them. It differs from the traditional methods of doing business in which the large pool of consumers was targeted as a whole. Most businesses report an improvement in sales after adoption of this strategy.




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