Market Segmentation and Targeting Presentation

Market Segmentation and Targeting Presentation Introduction to dividing customers into groups based on needs and characteristics. Introduction Market segmentation Targeting Positioning Divide market into distinct groups who have common needs and respond similarly to marketing actions Evaluate attractiveness of each segment and select one or more segments to enter Develop marketing mix for each target market Market segmentation and targeting provides focus to marketing efforts to maximize return on investment. Definition Market segmentation is the process of dividing a broad consumer or business market, normally consisting of existing and potential customers, into sub-groups of consumers (known as segments) based on some type of shared characteristics. Targeting involves evaluating each segment's attractiveness and selecting one or more segments to enter. Targeting involves applying the marketer's strategy to a specific segment of the market. Importance Reach Specific Customers Tailor Offerings Focus Resources Segmentation allows targeting marketing efforts towards specific groups of customers who are likely to be interested in your product or service. You can develop products and services tailored to the specific needs of different customer segments. Targeting efforts towards welldefined segments allows focusing marketing resources on the most promising opportunities. Increase Conversion Build Customer Loyalty Customers in tightly defined segments are more likely to convert than a broad, unfocused audience. Meeting the specific needs of customer segments fosters greater satisfaction and loyalty. Segmentation Approaches Demographic segmentation Segmenting the market based on demographic variables like age, gender, income, education etc. Geographic segmentation Segmenting the market based on geographic variables like region, climate, population density etc. Psychographic segmentation Segmenting the market based on psychographic variables like personality, lifestyle, values etc. Behavioral segmentation Segmenting the market based on behavioral variables like usage, benefits sought, attitude etc. There are four main approaches to segment a market - demographic, geographic, psychographic and behavioral segmentation. Targeting Strategies Geographic segmentation Demographic segmentation Behavioral segmentation Psychographic segmentation Segmentation Criteria Criteria Description Geographic Dividing market into different geographical units like nations, states, regions, counties, cities etc. Demographic Dividing market into groups based on variables like age, gender, income, occupation etc. *Market segmentation criteria from https: //www.feedough.com/what-is-market-segmentation-and-why-is-it-important/ Developing Segments Identify broad market interests Look at the overall market and identify common interests, needs or values that may represent market segments. Conduct market research Gather data and insights about potential segments through surveys, focus groups, interviews etc. Analyze behavioral variables Examine behavioral factors like usage occasions, purchase frequency, benefits sought etc. to identify behavioral segments. Develop segment profiles Create detailed profiles of each potential segment, including demographics, psychographics, behaviors, values etc. Segment Attractiveness Assess segment size and growth Evaluate current size and expected growth rate of each segment to determine overall viability. Evaluate segment structural attractiveness Analyze factors like competition, power of buyers & suppliers, threats of substitutes to determine segment profitability. Assess company objectives and resources Ensure segment aligns with company goals and sufficient resources exist to effectively serve the segment. Estimate segment profitability Forecast revenues, costs and profit potential of serving each segment to guide resource allocation. Positioning Match product features to target segment values Highlight how product benefits align with things the target values. Position against competitors Emphasize unique advantages Compare and contrast against competitor offerings. Communicate special features or benefits not offered by competitors. Focus messaging on segment needs Craft messages that speak directly to the target's needs and wants. Select appropriate communication channels Use media channels preferred by the target segment. Marketing Mix Product Price Place Promotion Designing the right product or service to serve customer needs Pricing strategy that aligns with customer segments' willingness to pay Distribution strategy to make products accessible to target customers Integrated marketing communications to reach and persuade target customers An effective marketing mix aligns product, price, place and promotion with the needs of the target customer segment. Challenges There are a few potential challenges that can come up with segmentation and targeting. First, it can be difficult to find the right balance between highlytargeted segments versus reaching a broader audience. Being too narrow with targeting may limit reach. Additionally, consumer preferences and behaviors change over time, so segments need to be re-evaluated periodically.