Market segmentation strategy is one of the emerging trends in business. The process which entails subdivision of the consumer pool into smaller units based on a number of criteria has been found to have numerous advantages. The need for segmentation was realized following numerous challenges that were encountered in meeting the needs of a huge heterogeneous group of clients. Many businesses have turned to segmentation in a bid to improve their returns.
For one to divide the market into the said units, they first need to conduct research. The research will help identify the exact needs of the customers and how best their needs can be addressed. It will also help the business in determining the criteria that can be used in creating the segments. Market research may take days, weeks or months depending on how large the market is.
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 a number of criteria that are used in creation of segments. Most commonly used criteria include the age, the gender and the preferences of various groups of customers. All these factors are important determinants of demand and supply of goods. Older customers are more conservative compared to the younger generation and the business needs to be aware of this as it provides goods and services.
Gender also has a significant influence on the patterns of demand and supply. Men and women have varied tastes and preferences for different types of goods and services. Women are more likely to conform to changes in fashion while men are not. Also, women have been found to be more regular shoppers compared to their male counterparts. Producers of goods and services need to be aware of these differences.
Behavioural segmenting is done based on the knowledge of patients as related to the use of goods and services. Seasonal buying is a behaviour that affects many varied goods and services. The demand for some goods is high on some occasions or seasons and reduces once the occasion passes. For instance, Christian gifts enjoy increased demand during Christmas and Easter. The producer needs to factor this into the production process.
Behavioural segmenting is also done based on product loyalty. The customers are classified into different groups depending on the degree of loyalty. Those that are most loyal should ideally be rewarded so as to encourage them. Factors that are contributing to lack of loyalty should be identified and dealt with.
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.
For one to divide the market into the said units, they first need to conduct research. The research will help identify the exact needs of the customers and how best their needs can be addressed. It will also help the business in determining the criteria that can be used in creating the segments. Market research may take days, weeks or months depending on how large the market is.
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 a number of criteria that are used in creation of segments. Most commonly used criteria include the age, the gender and the preferences of various groups of customers. All these factors are important determinants of demand and supply of goods. Older customers are more conservative compared to the younger generation and the business needs to be aware of this as it provides goods and services.
Gender also has a significant influence on the patterns of demand and supply. Men and women have varied tastes and preferences for different types of goods and services. Women are more likely to conform to changes in fashion while men are not. Also, women have been found to be more regular shoppers compared to their male counterparts. Producers of goods and services need to be aware of these differences.
Behavioural segmenting is done based on the knowledge of patients as related to the use of goods and services. Seasonal buying is a behaviour that affects many varied goods and services. The demand for some goods is high on some occasions or seasons and reduces once the occasion passes. For instance, Christian gifts enjoy increased demand during Christmas and Easter. The producer needs to factor this into the production process.
Behavioural segmenting is also done based on product loyalty. The customers are classified into different groups depending on the degree of loyalty. Those that are most loyal should ideally be rewarded so as to encourage them. Factors that are contributing to lack of loyalty should be identified and dealt with.
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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