In retail marketing, market segmentation is basically the procedure of dividing a large consumer base, usually consisting of potential and existing customers, into smaller groups of consumers depending on some kind of common characteristics. These smaller sub-segments are then marketed to the different target markets in terms of their interests, needs, wants and other characteristics.
These common characteristics can be grouped into targeted markets. This can further be broken down further into groups of types.
Market segments allow a marketer to understand the customer base as well as its interests.
They also allow the marketer to reach out and interact with these target markets in an effective manner. However, before creating market segments, it is important for a marketer to know first what kind of group he is dealing with. Depending on what type of group he is dealing with, the marketing tactics used would also differ. In other words, the marketing tactics used should depend on the target audience.
When it comes to market segmentation, there are five main types that you can use.
These include: psychographics, geographic location, behavioral attributes, socioeconomic status and personal attributes. Here are some tips on how you can use these five types of market segmentation:
This involves knowing the general characteristics of a particular market segment.
This includes age, gender, cultural preference, geographic location and other factors. Knowing these general characteristics allow you to create a more effective marketing campaign by targeting your advertisement towards the right kind of audience. For example, if your target market is the elderly, then you can advertise on TV, radio or print depending on the psychographics of the elderly people.
This involves the identification of the location of your customers.
This will help you in effectively segmenting your customers. There are different ways to do this. You can have demographic research, conduct focus groups, use surveys and even use GPS technology for a quick survey. These are just some of the methods you can apply for effective marketing segmentation.
This refers to the attitudes, values, priorities, and other traits of a consumer.
It is a complex market segmentation, because you need to know the various behavior factors of your target segment. This can be done through focus groups and surveys. By conducting focus groups, you can get insights about the common purchasing preferences and buying decisions of your target segment. You can then incorporate these buying behaviors into your e-commerce marketing platform.
This refers to the customer retention rate, loyalty, and purchase preferences.
If you want to increase your chances of increasing sales, you need to identify the key attributes that will lead to customer retention. The data you obtain from this will help you in designing a marketing campaign that is appropriate for your luxury car brand. For instance, if you know that the top customers are those who buy their cars on a regular basis, you can design your marketing strategy to include regular offers such as bonus offers and trade-ins so that you can increase your chances of capturing more frequent buyers.
There are other factors that can affect your target audience. However, these four types of factors are critical in determining the market segmentation strategy that you will use. In order for you to effectively design a marketing plan, you need to understand your target audience. This way, you can create a marketing strategy that targets specific groups or key attributes of your target audience. Doing market segmentation with the help of these four types will help you determine the right strategies to use.