Market segmentation strategy represents a major shift from the traditional ways of doing ways. It is a process of subdividing markets into smaller units that share some characteristics. This approach has been established to bear numerous advantages. The need to create segments has help tackle most of the problems that were encountered with the traditional business models. Many business entities have readily embraced the 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.
There are many ways that can be used to collect the required information. Some of the research tools that can be used include email surveys, questionnaires, face-to-face interviews and telephone interviews among others. The information that is targeted includes bio data, geographical location, personal preferences and so on. Customers that give similar responses are put into the same groups so that their needs can be addressed in the same way.
There are several criteria that can be used in the creation of segments. The most commonly used characteristics include gender, age, tastes and geographical location. The difference is age is an important determinant of demand for goods and services. In general, the elderly tend to be conservative while the young are more likely to accept changes. When producing goods and services it is important to have this in mind.
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.
Another form of subdivision is the use of product or brand loyalty. It is important to know which customers are loyal to products and which ones are not. At the same time, there is need to establish the degree of loyalty; some are not as loyal as others. By identifying the groups of customers who are loyal it is possible to identify ways in which to reward them and to retain them. For those who are not so loyal ways of improving the loyalty can be identified.
Market segmentation strategy is a method that has greatly helped improve sales. By identifying specific consumer needs and addressing them, the consumers are happy and are more willing to spend. This is different from the traditional approach where all consumers were regarded as one large group in spite of the differences that exist among them.
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.
There are many ways that can be used to collect the required information. Some of the research tools that can be used include email surveys, questionnaires, face-to-face interviews and telephone interviews among others. The information that is targeted includes bio data, geographical location, personal preferences and so on. Customers that give similar responses are put into the same groups so that their needs can be addressed in the same way.
There are several criteria that can be used in the creation of segments. The most commonly used characteristics include gender, age, tastes and geographical location. The difference is age is an important determinant of demand for goods and services. In general, the elderly tend to be conservative while the young are more likely to accept changes. When producing goods and services it is important to have this in mind.
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.
Another form of subdivision is the use of product or brand loyalty. It is important to know which customers are loyal to products and which ones are not. At the same time, there is need to establish the degree of loyalty; some are not as loyal as others. By identifying the groups of customers who are loyal it is possible to identify ways in which to reward them and to retain them. For those who are not so loyal ways of improving the loyalty can be identified.
Market segmentation strategy is a method that has greatly helped improve sales. By identifying specific consumer needs and addressing them, the consumers are happy and are more willing to spend. This is different from the traditional approach where all consumers were regarded as one large group in spite of the differences that exist among them.
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