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.
The process of creating subunits is preceded by research. This is done in a bid to identify the specific needs of consumers and how these needs can be solved. Depending on the size of the market, the research may take days, weeks or months. The research also helps in determining the criteria that will be used in creating the required segments.
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 has always exerted great influence on demand and supply for goods and services. Men and women have tastes and preferences that widely vary. For instance, women are more aware of changes that take place in fashion and are more likely to conform. They also shop more regularly than their male counterparts. Having this information is very important for the producer.
Seasonality in demand is a form of behaviour segmentation that is fairly common and affects a variety of goods and services. The demand for certain goods increases during certain seasons and decreases thereafter. If the producer has this information, then they will make sure that the goods in question are produced at the required time and adjust downwards later to avoid unnecessary losses.
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.
The process of creating subunits is preceded by research. This is done in a bid to identify the specific needs of consumers and how these needs can be solved. Depending on the size of the market, the research may take days, weeks or months. The research also helps in determining the criteria that will be used in creating the required segments.
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 has always exerted great influence on demand and supply for goods and services. Men and women have tastes and preferences that widely vary. For instance, women are more aware of changes that take place in fashion and are more likely to conform. They also shop more regularly than their male counterparts. Having this information is very important for the producer.
Seasonality in demand is a form of behaviour segmentation that is fairly common and affects a variety of goods and services. The demand for certain goods increases during certain seasons and decreases thereafter. If the producer has this information, then they will make sure that the goods in question are produced at the required time and adjust downwards later to avoid unnecessary losses.
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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