Do You Know Who Your Target Market Is?
Take a minute to answer that question. Were you able to? If so, what do you know about them? If not, why? Market segmentation is the process that companies use to divide large heterogeneous markets into small markets that can be reached more efficiently and effectively with products and services that match their unique needs.
There are four ways that a market can be segmented in order to help drive successful marketing campaigns that will result in higher sales and greater brand awareness; demographic, psychographic, behavioural, and geographic.
Strong market segmentation is a key part of developing target market personas that will aid you in your advertising endeavors. Market segmentation allows businesses to better meet the needs of their customers, increase profits, growth and retention, and target communication with your audience more efficiently.
What Makes a Good Market Segment?
Now that you know what segmentation is, we need to make sure you understand the principles behind segmenting your market. In order to have a segment that has meaning to the organization there are certain criteria that must be met.
- Measurable: The segment must be large enough that it can be measured.
- Profitable: Will segmenting the market create profit for the organization?
- Stability: It must be stable enough that it does not vanish after some time.
- Reachable: Can this segment of the market be reached by the company’s marketing programs in a cost-effective manner?
- Internally homogeneous: Do the customers in the segment prefer the same product qualities?
- Externally heterogeneous: The customers in different segments should all have different preferences.
- Consistency: The segment must respond consistently to a given market stimulus.
While this method of segmentation assumes that consumers in the same demographic group will have similar needs, the information is fairly easily obtained; it is one of the least costly ways to segment your market.
By segmenting the market based on psychographic characteristics you are able to be more niche in your advertising buys; maximizing exposure to key segments.
Geographical targeting optimizes your online marketing by matching your products or services to different cities, regions or countries with where your customers live and work.
In today’s complex world everything is customizable. Businesses need to also differentiate their marketing mix for consumers based on their unique needs, preferences, and behavioural characteristics.
4 Market Segmentation Strategies: Which Is Right for You?
Segmentation methods include breaking the market out based on demographic, psychographic behavioural, geographic characteristics. Creating a marketing strategy without proper segmentation of the market typically results in a costly, shotgun approach to marketing. When segmentation is done properly a company can be more focused in their efforts, see high customer retention numbers, and have better overall communication and engagement with their customer base.
Get Started Segmenting Your Market; LocalDirective Can Help
Just about every company could benefit from specialized targeting using demographic, psychographic, behavioural or geographic methods. At LocalDirective, our goal is to deliver maximum volume of business from the highest profit-producing segment. Thus, your national advertising may have some local or regional components to achieve the highest ROI, utilizing the capability of all of the major search engines (Google, Yahoo & Bing) to allow your ads to be shown to visitors located in the US, in targeted metros or states within the US, or even a radius around particular locations.
Unlike other digital marketing agencies that have one specialty or one point of view, LocalDirective has a rich and widely dimensional body of expertise in marketing strategy development, marketing plan development, online marketing and advertising, and website development. You need marketing segmentation to be effective, so why not choose a digital agency that has the in-house experience to deliver what you need?
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