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Types of Market Segmentation (+ Benefits, Tips & Examples)

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market segmentation

So you already have that best product in the market and you’ve done all the campaigns you could. However, customers seem not to be coming by as expected. A good acquaintance with the types of market segmentation might just be all you need to make your business bubble. So, let’s take a walk through all the specifics you need to know on this subject.

Market segmentation aims at dividing your potential customers with similar needs and preferences into similar subgroups.

The bottom line of this is, with a deep understanding of market segmentation and its types, a  business owner can present a product/ service to his customers and be almost 100% certain that they are gonna buy it. Now, this is not some abracadabra in action but some logical and proven modus operandi that works wonders.

A major step in the segmentation process is selecting a suitable base. This aims at yielding segments with maximum internal homogeneity that are meaningful for the specific market problem or situation.

Let’s get our head around this by taking a look at the characteristics and different types of market segmentation.

CHARACTERISTICS OF MARKET SEGMENTATION

A good thought approach and a basic understanding of the market to be segmented are important in selecting the type of market segmentation. For example, data showing the family size of people in a certain place is of no use to a shampoo seller but a contraceptive company will find this invaluable. So, a good market segment should be identifiable, substantial, accessible, responsive, actionable, stable.

  1. Identifiability:

    This is the ability of a business to identify distinct groups within the market place. It is perhaps your compass when compared to other types of market segmentation because you need to know the people your product is meant for before any other thing.

  2. Substantiality:

    The segment has to be large enough or have a high purchasing power to make the business profitable. If not the business will have a hard time trying to establish itself in the market.

  3. Accessibility:

    The targeted segment should be able to access the business. So, through every possible means, social media, etc a company should stay in touch with its segment.

  4. Responsiveness:

    How will consumers in the segment respond to marketing offers targeted at them? Your market segment should respond adequately enough to your product. If possible let your market segmentation be so good that your product becomes an essential part of the daily life of your customers.

  5. Actionable:

    The segment should be able to provide guidance in marketing decisions. So this means the segment controls your action in the market.

  6. Stability:

    The stability of the segment has to be long enough to enable adequate profitability of the business.

The above list which are the characteristics of good market segmentation will serve as a good basis in the selection of a type of market segmentation for your business. So you don’t hawk female jewelry in a male hostel.

READ ALSO:  DEMARKETING, ALL YOU NEED TO KNOW (+CASE STUDY)

TYPES OF MARKET SEGMENTATION

These six major types of market segmentation; Demographic, geographic, psychographic, behavioral, need-based, transactional, will help you in creating a good market segment for your business.

  1. Demographic:

    For a business-to-customer context, the following attributes could be considered: Age, gender, education, occupation, income, socio-economic status. A jewelry store will find the income attribute handy in their segmentation.

  2. Geographic:

    Have you ever tried to access a website and they tell you that users from your location are not allowed to access the site? Well, that’s an example of geographic segmentation. The attributes in this type are the continent, country, state/region, city. But different avenues within a city are known to show interest in a specific kind of business. Like a city might be the business hub of a state but not all avenues within the city are markets some might show good interest in entertainment.

  3. Psychographic:

    These segments are based on personality. So you need to know the kind of person your customers are in terms of their interests, attitudes, values, lifestyle. Are they socially aware, active ‘club going’ youths, conservatives, traditionalists, etc? I once saw a Youtube video about a Chinese billionaire who spends $400 on a meal when I showed my friend, he asked what kind of cockroach will worth $400? A business selling only Chinese dishes in Nigeria will find it difficult to thrive cos these guys don’t value it.

  4. Behavioural:

    This divides your audience based on their previous behavior towards your brand. These attributes can be considered for this segment: Usage level, previous purchase, purchase patterns, product knowledge, product rating. A restaurant might want to segment their customers based on the meals mostly ordered for (purchase patterns). So this causes dynamism in their menu as it will be updated based on customers’ order patterns.

  5. Needs-based:

    This group customers based on their needs. Categories of needs under this type of market segmentation are problem-solving needs, emotional needs, functional needs. For example, data on potential customers with celiac disease will help a food manufacturing company to segment the audience with the need for gluten-free products appropriately.

  6. Transactional segmentation:

    This type of market segmentation group customers based on spending patterns. Use the RFM (Recency, Frequency, Monetary) model to group these guys. So a footwear store that wants to re-engage their loyal customers who haven’t visited them in 6 months and segment them based on their RFM behavior at the end, might want to target customers who visit often but spends small and customers who visit less frequently but spends a lot in their promotions.

READ ALSO: 30 MOST SEARCHED CUSTOMER SERVICE SKILLS (FULL DETAILS)

LEVELS OF MARKET SEGMENTATION

Every level of market segmentation requires a different marketing approach. Therefore, every marketing should have a good understanding of these levels, how to address them, and how they work. These levels of market segmentation are Global, Niche, Localized, Individuals.

  1. Global:

    It’s a broad level of market segmentation because it contains general information about the audience. For instance the age, income, country. So it’s not broken down in any way.

  2. Niche:

    A niche is a group of consumers that prefer the same product. The global market segment contains a niche. For example, if you sell adult male shoes, your global market will target men >17 years. Within this global segment, you have niches of consumers interested in black shoes, brown shoes, etc.

  3. Localized:

    Moving down from the niche you find where your consumers are localized. For example, you might find that a lot of people living in a particular avenue are under the black shoe niche. So, you can localize customers by using this avenue. This helps you create more of your brand’s black shoe billboard in that avenue.

  4. Individuals:

    This final level of market segmentation deals with consumer habits. Because it’s concerned with collecting data from customers which helps in placing them in any of the levels above.

Having gone through the levels of market segmentation let’s move further to the benefits of market segmentation.

BENEFITS OF MARKET SEGMENTATION

I talked a lot about the characteristics, types, and levels of market segmentation, you must have figured out one or two benefits of market segmentation. However, the exclusion of a subheading attributed solely to the benefits of market segmentation is gonna be like an employer explaining the job specifications of a job to their employee and skipping the profit part. So, here are the top benefits of market segmentation:

  1. Realization of market opportunities:

    A good study of the needs of a segment can find out a low level of satisfaction from the present offering of a competitor. So this will present an opportunity for the business owner.

  2. Developing marketing programs:

    A clear insight into the response-ability of a specific market segment will help a company develop nice marketing programs.

  3. Proper marketing appeals:

    A company, instead of creating a marketing campaign aimed at all potential buyers can create different marketing campaigns aimed at the needs of different customers.

  4. Appropriate media choice of advertisement:

    Another benefit of market segmentation is this. You can transfer funds to the appropriate media which has more potential of getting to the segment of choice.

  5. Efficient use of resources:

    Segmentation will help a retailer direct funds to products that are more likely to be purchased by their most profitable segment. So this helps to efficiently and effectively manage funds.

  6. Better service to customers:

    Proper market segmentation can facilitate customer satisfaction and this increases their chance of coming back for more. So kinda a positive feedback mechanism.

  7. Logical price fixation:

    This benefit of market segmentation helps to fix the prices of goods and services. For example, the price for low-income groups has to be lower and product and promotion campaigns adjusted appropriately.

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Target Marketing: All you need to know

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target marketing

A target market definition is simply a group of customers or organization most likely to buy a company’s product. The process of marketing to that selected group is target marketing. Target market can also be called market segmentation or Target audience. Understanding the term ‘target’: Target means ‘mark to shoot at’ as for practice. It is the category of persons or organization(s) that a company wants to have as customers. This article would help you understand the concept, types of target marketing, strategies and why it’s important to your business.

Concept of Target Marketing:

Target marketing involves the division of a market into different parts or segments. Then, focusing your sales promotion, primary works and all marketing activities on one or a few key segments. The segment consisting of customers whose needs are most suitable for your product and service offerings. This would help in the strong efficient implementation of experiential marketing

Target Marketing in Business Plan

Companies use this to learn more about their consumers, and thus, make peculiar adverts for unique groups to achieve maximum response. The products and services of the firm will be totally to serve those particular individuals, dealers or distributors. Our over 500+ business plan can give you a picture of this segment marketing as it relates to your business

Why is Target Market so important?

Tentatively, in marketing, if you are trying to talk to everyone you might not be reaching anybody. So, target marketing gives you a ground as it opens doors for you to speak directly to your defined audience; attract new and more customers.

Read Also: A comprehensive guide to Service marketing

Time and again, Target Marketing helps sellers build deeper customer loyalty. That is, the proximity between the buyer and the seller gives a clear understanding in trade and to checkmate your progress, as well as differentiating your brand from that of competitors as you find your way to the top of the business class.

Types of Target Marketing:

Target marketing can be divided into four main levels. Let’s examine them below:

1. Demographic Target Market:

This is one of the frequently used types of target marketing. It basically concerns the human population and their metamorphosis with time. Inclusively, the likes are about individual’s education, gender, age etc.

Examples of Demographic Target Market are:

Classification based on age, gender and ethnicity. A company producing women wears targets its promotional efforts to the feminine gender.

2. Behavioural Target Marketing:

This is about human conduct with respect to social norms. The way customers act and their reaction to the brand.

Examples of Behavioural Target Market:

Since this type of market is based on lifestyle preferences, the usability status is inevitable. So, this actually involves people’s purchasing and spending habits. For instance, a company producing boats, swimsuits and life jackets aims only at customers that enjoy swimming and their leisure on water.

3. Psychology Target Marketing:

This type of target marketing involves cognitive responses (or psychological profile), as well as the consumer’s income, characteristics and personality (emotions inclusive).

Examples of Psychology Target Market:

Personal goals, values, interests and priorities play a role in this type of Target Market. However, it is not easy to identify as it requires research to spot in the customers. Furthermore, considering the case of pure diamonds, gold and private jets, they are only produced for higher income earners and organization. Hence, low and average earners can use buses or wear cheaper jewelries.

4. Territory Target Marketing:

This is believed to be the simplest type of Target Marketing because it’s just based on geography. Thus, the productions are done to fit into the climate, weather and topography of the aimed consumers.

Read More: Understanding Your marketing environment

Examples of Territory Target Market:

The likes of these are location production and demands, zip-code, country choices, urban and rural investments. For example, thick and heavy sweaters or jackets are produced mostly for people residing in temperate and snowy regions to keep them warm.

Target Marketing Strategies:

These are processes in learning about your targeted customers as you find a new market and more opportunities. Target marketing strategies help you increase market share and would help you put the information into practice for effective results. This includes:

1. Buyers and Seller Analysis:

In this strategy, the company is required to have the audience of their existing consumers, interview them, and the sales team. The sales team are resourceful as they ask customers questions that aid to identify what they really want, and if they are satisfied with the products and services. To achieve this, the sellers use their web or Google page to check customers’ comments about their brand and the frequency of what they search for.

2. Buyer Persona:

A Buyer Persona is a document which customers use to fill in personal information about their age, gender, job title, commendations and challenges they have using the product and services. In this light, the seller obtains the description of its ideal customer and the exact type of consumers they want to target and attract.

3. Questioning and Identification of Brand:

This strategy drives the sellers to new marketing tactics, and to achieve this, the seller asks questions like:

What solutions can the brand provide? Answering this would help you device efficient product marketing strategies

What are the ways to beat other competitors?

What are the customers testimonies?

Which skills are we lacking?

Answers to these questions and its likes will help your brand get clear goals and draw new customers, as well as increase in profit with existing consumers.

4. Campaign and Effectiveness:

Once you find a new market you want to explore, it is advisable you do campaigns, show off your brand and do free trials. Additionally, allow people to use your product, and track the results. Consequently, you will see the customers or organizations you can specifically target. Continue the process, test and iterate.

Target Marketing Analysis:

This is a review of your noumenon customers as to understand who you will sell to. Thoughtfully, in conducting this analysis, it might be a little bit hard, but the worth is invaluable. Here are some questions to ask:

Who are my potential customers?

What are their interests and income?

When exactly do they buy my brand?

Where do they work or reside?

Why do they buy from me?

And finally, how do they act and react to the product and services?

How to do Target Market Analysis:

In relation to what you are searching for, analysis isn’t easy but try to gather enough information about your customers. To do this, use your past sales book and check out for the average purchase rate or price. Additionally, inspect when the marketing is hasty and when it’s not; the week/month you sold your brand the most and reasons to that effect. Hence, find out why your customers patronize you and why those that did stop. Try to modify ways to attract more customers. From this analysis, you can then make plans to market your brand with bold steps and confidence.

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Promotion Mix: Definition, Types, Importance, & Strategies

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promotion mix and market segment




So, you’ve come up with that world-class product designed to meet the exact needs of the market. However, the best books are not always the bestselling, and that “out of this world” product can’t sell itself. Hence, as a business owner or marketer, the promotion mix strategy should always reverberate in your head. Because your target market segment needs information about your product or service and the reasons why they should go with your brand. Therefore, let’s talk about the promotion mix, and all the facts you need to know to establish one suitable for business.

What is the promotion mix?

Promotion mix is a list of channels a company chooses to help them achieve a certain goal in the market. The communication in these channels must be compelling to attain reasonable market effectiveness. So, your selected promotional mix must be:

  • Captivating

  • Educating

  • Persuasive

The promotion mix elements you choose must be the most appropriate while developing your promotion mix strategy.

Promotion mix elements

The promotion mix elements enable a company to promote their products effectively to its target market segment. Based on a company’s objectives and budget it allocates resources to the right elements. These elements are Advertisement, public relations, sales promotion, direct marketing, personal selling. Let’s get to the details of each.

  1. Advertisement:

    It is a way companies communicate their product and services through paid commercials. Most times, a third party serves as the facilitator. So, a company gets its promotion to the third party’s platform, and the third party gets it to their viewers. However, companies shouldn’t do this randomly, they should select the platform that has their target market segment. Examples of advertisement media are television, billboard, radio, posters, mobile apps, emails, web pages.

  2. Public relations:

    This way companies try to promote a positive public image. This could be achieved by having promotion shows with third parties, inserting their news stories in the media, and press releases about their activities.

  3. Sales promotion:

    In this element of the promotion mix marketers try to boost sales through an afore determined limited market offering. For example, flash sales, coupons, recurring sales. Clearly, there are advantages to this. While new firms can use it to draw customers to themselves. Old ones, that have achieved good market penetration, can sustain the interest of their customers via it.

  4. Direct marketing:

    With methods like interactive consumer websites, emails, messaging firms can persuade customers into a call to action that prompts the customer to act. These channels of direct marketing produce results that are immediately measurable cos firms instantly get updated on customers’ interest.

  5. Personal selling:

    Some firms feel that a direct face-to-face or over the phone interaction with their potential customers through agents like sales personnel is closer to the customer. This promotion mix element is called personal selling. It is the most traditional form of promotion. Clearly, for the face-to-face interaction, there is a significant amount of investment in time from the customer and sales representative also. So, this might be less efficient than other elements.

READ ALSO: MARKETING COMMUNICATION: ALL YOU NEED TO KNOW (DETAILED GUIDE)

PROMOTION MIX STRATEGY

Now that you know the promotion mix elements. Let’s look at how you can select the promotion mix that’s right for your company under the promotion mix strategy.

  1. Determine your customers:

    This should be a priority in your promotion mix strategy. You have to know where to get your target market segment. Some signature behavior could help with this. For example, If you are a jewelry store owner that targets consumers whose yearly income is more than $120,000. Your selected promotion mix element will target people who make such amount yearly.

  2. Determine your objectives:

    This is the reason why you want to promote your product. Different companies have different objectives for their commercials. Examples are, acquainting a new product to the market, correcting a wrong impression, retailer persuasion to stock more of your product, communicate new features to existing market to enable product development.

  3. Design your message:

    In designing a message you have to consider both the content and the format. The content is the words, images, and text used to pass your message to the customers while the format is the way you pass that idea. Different promotion mix rely on different formats to communicate their message effectively. For example, while a web advertisement relies on colorful graphic images, personal selling might involve oratory charisma that will persuade the customers.

  4. Make your budget:

    Once you’ve garnered information about your market segment, then you use that as a guide to making your budget. Also, make funds available to you into consideration.

  5. Select your promotional mix:

    After designing your message you need to select the promotion mix that will be best for your marketing campaign. So, you should consider the different promotion mix and know the ones that are best for you.  For example, The promotion mix of a footwear store that makes a budget of $3,000 for their marketing campaign could be as follows.

      • 50% sales promotion: $750 coupons, $750 worth of footwear for winners of their contest.

      • 20% Advertisement: $600 for web advertisement.

      • 20% public relations: $600 for press release.

  6. Use elements of the selected mix to complement each other:

    So, in the example, the store could use the elements in the mix to complement one another. For example, a web advertisement announcing their free coupons, and contest to their market segment. Then, a press release of the winners of the contest to the public.

  7. Measure the results and make adjustments:

    Clearly, a rise in the number of sales by your firm would serve as a good yardstick in the measurement of how effective your promotion mix has been. You adjust for more growth or elimination of an ineffective element.

READ ALSO: 7 WAYS TO DEFINE YOU AND YOUR BUSINESS

IMPORTANCE OF PROMOTION MIX

The importance of promotion mix are as follows

  1. Credulity:

    Public presentation of your company helps consolidate the belief of legitimacy and permanence in the minds of the consumer.

  2. Brand name reinforcement in consumers’ mind:

    It is a common notion that something that gets repeated gets remembered and something that’s remembered gets done. So, in a promotional mix, especially advertisements, there are repetitions of your brand to the consumer. And this can lead to your brand name being synonymous with that product. For example, in Nigeria, most people call every noodle in the market Indomie.

  3. Increase in sales:

    The most common reason why companies engage in promotion is to promote sales and this will therefore increase profit.

  4. Build relationships:

    Companies can build strong relationships with retailers in that industry by creating a promotion mix targeted at them. Hence, this could help the company get a good market share of its market segment.

  5. Stir excitement:

    This is usually achieved by sales promotion. Some consumers are turned on by contests and by giving it to them. You can turn a dreary purchase into a livelier one.

FACTORS THAT AFFECT PROMOTION MIX

Different factors that affect promotion mix can be company-related, product-related, or customer-related. So, let’s look at these factors and know how they can influence your promotion mix.

  1. Product type:

    There are different types of products. Some of the types are branded products, non-branded products, and new products. Clearly, marketers ought to use different elements of the promotion mix for any of the aforementioned product types. While advertising will be more suitable for branded products, personal selling might be the element of choice for non-branded products.

  2. Product usage:

    Consumer goods usually target more customers than industrial goods. So, advertisement and sales promotion are more appropriate for consumer goods while personal selling is more appropriate for industrial goods.

  3. The target market segment:

    The target market segment is a factor that can affect promotion mix. Hence, a firm which has distributed customers within a country can use social media or TV advertisement for their products. However, firms that have a single area of concentrated customers can just use personal selling.

  4. Availability of funds:

    This is a very important factor that affects all promotion mix. Personal selling is the cheapest in the cost spectrum of all promotion mix. Advertisement and sales promotion are costly and should be done by firms that can afford it. So, available funds will affect your choice of promotion mix greatly. Also, not only does funds affect your mix it also affects the duration of your promotion mix.

  5. Marketer’s competence:

    Some marketers lack experience in some promotion mix. So, they tend not to use it in their promotion campaign even when it’s vital to the success of that campaign.

Conclusion

With the details outlined in this article, hope you were able to get a good grasp of the concept of promotion mix? If not reach out on the comment section for clarifications or additional information.




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20 TOP DIGITAL MARKETING AGENCIES IN NIGERIA (UPDATED)

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top Digital marketing Agencies

Buying behaviours have drastically changed over the years and now most consumers are starting their buying journey online. This new change has birthed the need for hiring top digital marketing agencies to help with the need for marketers to leverage the use of the internet to bring their products and services closer to the consumers, regardless of the size of the business.

Digital marketing is a form of advertising that leverages the use of the internet to promote goods and services, through digital channels like social media, search engines, website, blogs, etc. Using Top Digital marketing agencies is the quickest and most measurable way to get business in front of people who are looking for their products or services. It is almost impossible to have a product or service that won’t sell online.

Since most businesses have a specific audience they are trying to reach through social media marketing, digital marketing makes that possible through the use of the internet and other digital channels since most consumers already belong to one digital platform or the other.

Read More: Highly effective social media marketing strategies

In the Nigeria today, the trend remains the same with marketers making best use of the internet to generate more leads and make more sales. We have carefully selected the top 15 digital marketing agencies in Nigeria, capable of handling any form of advertising and promotion for businesses in Nigeria, they are :

Top Digital marketing Agencies In Nigeria Are;

1.Wild Fusion Limited

Services: Media, Digital Strategy, Internet Marketing, Social Media Marketing, Mobile Marketing.
Founded: 2010
Location: Lagos

2.Tech O’Clock

Services: Website Design, Social Media Marketing, Unique Content Creation
Location: Lagos

3.Wow Effects Communications

Services: online reputation management, Graphics Design, Social Media Marketing, Conversion Rate Optimization, Website Development, Content Marketing, Digital Strategy Development, Search Engine Optimization, Search Engine marketing.
Location: Lagos

4.Autowebnet

Services: Web Development, Web design, Logo Creation and Branding, Digital marketing, Search Engine Optimization (SEO).
Location: Uyo

5.Errand Media Limited

Services: Application Development, Digital Marketing, Field Agents, Media, Web Design, Web Development, Robust Call Center Solution.
Location: Lagos

6.Nelson Reid’s

Services: Public Relations, Influencer Marketing, Digital Marketing, Creative Storytelling, Brand Activation, Media Buying.
Location: Lagos

7.Primegate Digital

Services: Optimization, Search Engine Optimization Analysis, Social Media Marketing, Paid Search.
Location: Lagos

8.Taget Media

Services: Search Engine Optimization, Social Media Marketing, Pay-per-click Ads, Video Creation and Promotion
Location: Lagos

9.Big Field Digital

Services: Software Engineering, Digital Marketing, Mobile App Development, Website Design and Development, Social Media Marketing and Management, Pay-per-click Advertising, Content Marketing and Search Engine Optimization, Email Marketing and Automation, Animated Explainer Videos.
Location: Ibadan

10.Brand Envoy Africa

Services: Branding and Design, Digital and Traditional Advertising, Digital and Traditional Marketing, Content Creation, Creative Outsourcing.
Location: Lagos

11.Silva Create Digital Agency

Services: Social Media Marketing, Website Design, Search Engine Optimization, Pay-per-click Marketing, Mobile Application Development, Email Marketing, Web Development, Reputation Management, Enterprise Software.
Location: Port Harcourt

12.DientWeb

Services: Website Design and Development, eCommerce/Online Store Development.
Location: Lagos

13.Ferman Digital Agency

Services: Branding and Graphics Design, 3D Modelling, Website Design, Printing, Digital Marketing, Corporate Photography.
Location: Lagos

14.Ecagon Technologies

Services: Search Engine Optimization, digital solutions, lead generation automation,sales copy and marketing
Location: Lagos

15.DigitalSprout Creative Agency Limited

Services: Digital and Growth Marketing, Brand and Experience Design, Web and Mobile Solutions.
Location: Port Harcourt

16.Rushing Tap

Services: Video Strategy, Video Production, Online Marketing, Social Media Management
Location: Lagos

17.socialander.com

Services: Creative Designs, Website Design, Digital Marketing, Search Engine Optimization, Social Media Marketing, Email Marketing, Content Marketing strategies
Location: Lagos

18.ALBANNY TECHNOLOGIES

Services: Website Design and Development, Mobile App Development, Digital Marketing, Professional Training.
Location: Uyo

19.BrandGeko Digital Agency

Services: Branding/Graphics Design, Website/Mobile App Development, Digital Marketing, Consultancy
Location: Port Harcourt

20.VIS Nigeria

Services: Website Design and Development, Corporate Branding, Digital Marketing, Website Maintenance, Corporate Training, eCommerce
Location: Abuja

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