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Market Segmentation and Market Targeting Strategies

Market Segmentation and Market Targeting Strategies

Market segmentation is one of the most effective marketing strategies for increasing sales and reducing costs. Organizations use market segmentation strategies to increase market share within a given market segment. Listed below are three ways to segment the market. Which of these will work best for your business? Let’s explore each of these strategies in detail. Here are a few examples of each. Listed below are the advantages and disadvantages of each of these methods.

Focus on the whole market

To become the go-to provider in a market, you must understand the needs and wants of its various segments. The most effective way to focus on these segments is to study the behaviors of their largest clients. Knowing their needs and wants will help you create the best customer experience for these future customers. Focusing on a key customer segment can also help you satisfy the needs of that group. Access/Information has 30 years of experience conducting market research and can help your business develop a sustainable market focus strategy.

Focus on a few primary segments

While the number of secondary segments can be as large as a thousand, focusing on a few primary segments is an effective way to maximize your profit potential. There are several reasons for focusing on a few primary segments when market targeting. The first is that there are fewer competitors in each segment. That means that your product or service will be better suited to those buyers. In addition, the focus will give you a better understanding of your target market.

A key to focusing on a few primary segments is to know what common characteristics a potential audience has in common. For example, most consumers desire safety when buying a car. For that reason, car manufacturers may choose to target groups such as families with young children. In addition to demographics, market segmentation also lists product features and benefits for consumers. A successful segmentation strategy will help you focus your advertising efforts on the right group.

Focus on accessibility

In addition to demographic data, commercial marketers can segment their market based on four standard attributes. These include geographic location, vital statistics, and beliefs, values, and opinions. The size and scope of a segment are determined by its measurable and actionable size, as well as its actionability, or distinctness. These characteristics determine how a segment will be reached. Below are four examples of market segments. Each segment should be targeted based on its actionability and size.

Focus on purchasing power

To determine which industries offer the best growth opportunities, you must understand consumer purchasing power. While Nielsen’s study looks at the entire consumer population, small businesses often target specific segments. For example, a small business catering to high-income consumers has different purchasing power than a low-income business. Knowing the purchasing power of the market you’re targeting is important, but you should also consider other factors when identifying potential customers.

When targeting the market, remember that buying power is highly related to the rate of inflation and price fluctuations. Net income is also closely tied to purchasing power. When prices rise, consumers may become more frugal. In addition, a small business’s net income may fall along with price increases. To determine the level of consumer purchasing power in a particular market, understand the consumer demographic’s net income and occupation. Knowing this information will allow a business to determine which demographics are the most profitable.

Market Segmentation and Market Targeting Strategies

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