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.
It is important to use stable criteria when segmenting. Attributes that only exist for a short period of time should not be used. When proper criteria are used, the segment remains in existence for a long time and this gives the marketer an opportunity to reap from the product segmentation that has taken place.
There are set of characteristics that have been frequently used for segmentation. The most common of these is geographical location of consumers. This includes, for instance, dividing the pool of customers based on their country, state or neighborhood of origin. Customer profiles are created based on demographic data and this determines the kind of services or products that they will receive.
Behavioral segmentation is a popularly used type of marketing. The idea here is to divide the consumer pool into different groups based attitude and on the knowledge of various products and services. It encompasses what is referred to as occasional buying. Occasional buyers are customers who buy goods or services depending on the prevailing conditions. This may refer to, for example, the increase in the demand of gifts during Easter or Christmas by Christians. Other occasions that can be used to segment consumers include weddings, birthday parties and funerals.
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.
It is important to use stable criteria when segmenting. Attributes that only exist for a short period of time should not be used. When proper criteria are used, the segment remains in existence for a long time and this gives the marketer an opportunity to reap from the product segmentation that has taken place.
There are set of characteristics that have been frequently used for segmentation. The most common of these is geographical location of consumers. This includes, for instance, dividing the pool of customers based on their country, state or neighborhood of origin. Customer profiles are created based on demographic data and this determines the kind of services or products that they will receive.
Behavioral segmentation is a popularly used type of marketing. The idea here is to divide the consumer pool into different groups based attitude and on the knowledge of various products and services. It encompasses what is referred to as occasional buying. Occasional buyers are customers who buy goods or services depending on the prevailing conditions. This may refer to, for example, the increase in the demand of gifts during Easter or Christmas by Christians. Other occasions that can be used to segment consumers include weddings, birthday parties and funerals.
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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