Even if you believe you don't need them, you should at least have a good understanding of what Market Segmentation and Target Marketing are.
The purpose of market segmentation
The primary purpose of the market segmentation process is not to reject any group of people, but to
better address every group that your product or service can reach. Thanks to that you can maximize the return on investment of both your time and money put into your marketing efforts.
While mass marketing (having a broad marketing mix designed to appeal to most of the population) was commonplace up until the 1950’s (and still exists in some industries today) it is generally not an effective approach any more. And it usually exposes the business to many competitive threats.
With the vast choice people have today, it's nearly impossible to make something that a large number of people want a lot. You've got to know who those first users are and how you’re going to get them. And then you focus entirely on them, and you make them super happy.
There’s a better way to build a sustainable, independent business than making a bunch of assumptions and hoping for the best. Defining your audience is a critical milepost on that way.
What is target marketing & market segmentation?
Target Marketing involves breaking a market into segments and then concentrating your marketing efforts on one or a few key segments consisting of the customers whose needs and desires most closely match your product or service offerings.
Market Segmentation is the process of dividing a market of potential customers into groups (segments) based on different characteristics. The segments should be composed of customers who
respond similarly to specific marketing strategies.
Once a business selects specific Market Segments for their marketing and strategy purposes, these chosen market segments will then be referred to as Target Markets. Therefore, there should always be more market segments than target markets, as businesses will typically choose to focus their efforts on a few specific market segments only.
Three choices for market segmentation
The first choice is to ignore the concept of market segments and the differences in consumer needs. With this approach (which is sometimes referred to undifferentiated marketing or mass marketing), the business will provide a generic (or middle-of-the-road) offering to the marketplace, with the hope that it appeal to some consumers.
The second choice is to focus on one target market only (which is sometimes referred to as concentrated marketing).
The third choice is to adopt a strategy of targeting multiple target markets, each with different marketing mix (which is referred to as differentiated marketing, as the firm differentiates between segments).
Why do you feel you should not segment?
The most frequent reason to not segmenting the market is indecisiveness and fear that restricting the target group to anything less than "men and women 18-65 years old" is going to make it even harder to find clients. But in reality:
- It dilutes your marketing message. Because if you want to talk to an 18 year old male and a 65 year old female you have no other choice but to use general and often boring statements. These are incapable of creating strong emotions, feelings and very often even a basic interest.
- Any feedback you'll get from your clients won't tell you much. Let alone help you improve or decide what changes to introduce to gain new clients and avoid losing current ones. It's often better to create a successful product for 16-20yo males and then build on that experience to create another product for 21-25yo, then 26-30, then for women. Each next one will be so much easier and faster to create than one-catch-all from the beginning.
The Old Spice guy actually came from an insight that most of the time it's wives and girlfriends buying deodorant for their men. The idea for the campaign came directly from that.
How to segment your market?
Stay tuned for future articles explaining methods of segmentation. In the meantime, if you'd like to discuss your specific case we offer free marketing and branding consultation.
Contact us any time to start a conversation.
