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Effective Market Segmentation Strategies

The document discusses the importance of market segmentation in developing tailored marketing strategies to enhance consumer satisfaction and improve returns on investment. It outlines the objectives, processes, and criteria for effective segmentation, emphasizing the need to identify distinct market segments and adapt products or services accordingly. Additionally, it presents various marketing strategies, including concentrated, differentiated, and undifferentiated marketing approaches.

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15 views14 pages

Effective Market Segmentation Strategies

The document discusses the importance of market segmentation in developing tailored marketing strategies to enhance consumer satisfaction and improve returns on investment. It outlines the objectives, processes, and criteria for effective segmentation, emphasizing the need to identify distinct market segments and adapt products or services accordingly. Additionally, it presents various marketing strategies, including concentrated, differentiated, and undifferentiated marketing approaches.

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Market segmentation

• In this presentation we will see how to properly carry out a


market segmentation, a phase of your market study
that can give a new boost to your commercial and strategy
marketing. Learn how you should choose the strategies and the
segmentation criteria that adapt to the
needs of your company and what are the advantages
competitions that your business can access
Objectives of Market Segmentation
• The objective of market segmentation is nothing other than being able to
apply differentiated business strategies for each segment of
market, thus achieving greater consumer satisfaction and a
better return on marketing investments.
What is market segmentation?
• Market segmentation is an important phase of any study.
of the market. Normally, the "market" is a heterogeneous group and
diverse consumers with tastes, needs, and motivations of
different purchases.
• When we conduct market segmentation, what we seek
to divide the market into small groups of
consumers, or market segments, that are homogeneous, is
to say, that they share common tastes and needs, in order to
carry out a differentiated commercial strategy for each of
they.
What is market segmentation?
• Thus, we will be able to precisely identify what the needs are.
and the behavior of the different market segments, which
will allow us to develop or readapt our products or services
in the way that best suits their preferences and, thus, achieve
a competitive advantage in the target segments.
• Segmentation is very important for self-employed individuals and small and medium-sized enterprises.
that their chances of commercial success will be much greater in the
to the extent that they manage to specialize in a market segment
and provide additional value that larger companies offer.
size.
Why perform segmentation of
market?
• The possibility of recognizing and distinguishing the different segments of the market can
bring different advantages to our business by helping us with various tasks, such as,
example:
• Select the markets that best fit the products and characteristics of
our company.
• Develop a commercial and marketing strategy more tailored to the target segment
the "target".
• Increase customer loyalty towards the product by better fitting their needs.
needs of the consumer segment.
• When segmenting, the goal is to identify the target segment of the business, that is, the
the group of "ideal" consumers to whom our product or service is targeted. It is what
commonly referred to by the Anglo-Saxon term 'target' or target audience.
Why do segmentation?
market?
• However, some disadvantages must also be taken into account:

Segmenting markets can result in increased costs.


Yes, for example, it is decided to manufacture or adapt a different product for each
market segment.
Before embarking on a thorough market segmentation,
It is necessary to take into account factors such as demand instability,
whose needs and preferences change over time.
¿Cómo se hace una segmentación de
market?
In order to carry out a correct market segmentation, we must first establish the
characteristics that each market segment should have.
• They must be identifiable.
• They should be easily accessible.
• They must be different from each other. When carrying out a segmentation of
markets, it is necessary for there to be perceptible and measurable differences in the
assessments of the different products made by consumers.
• They must have stability over time
• It must have sufficient sales potential to justify the expense.
• They must be useful for the implementation of our commercial strategy.
How is market segmentation done?
Next, we must choose the process and the strategy to follow that, as a general rule,
consists of the following phases:

• Identification of segmentation variables and market segments, based on


our product or service.

• Development of descriptive profiles for each segment.

• Evaluation of the attractiveness of each segment, usually determined by its potential


sales.
How is market segmentation done?
• Selection of the target segment(s) (target or ideal audience). The choice of a
market segmentation should be done by measuring its current and future potential, as well as the
existing competition in it. Sometimes a small segment is more profitable in the
that occupies an exclusive position in a large segment where there is competition with others
brands.

• Identification of possible actions to position oneself in the chosen segments: creation


of a new line of products or services, adaptation or improvement of a product, etc.

• Selection and application of the chosen positioning actions for each segment of
market.
How is market segmentation done?

• Self-employed and micro-enterprises, given their resource limitations, normally


they usually carry out their segmentation processes based on the information
that provide direct observation of the market, publications
specialized and statistical data.
• Sometimes also those obtained from interviews with experts in the sector and
of some discussion group they get to set up.
• Over time, it is also recommended to conduct a survey among the employees themselves.
business clients in order to get to know them better and make progress in the
segmentation and specialization process.
Market segmentation criteria
• There are different criteria to identify the market segmentation variables.
but perhaps the simplest way for a small or medium-sized business is to distinguish between
general criteria (common to the entire population), specific (focused on our
product or service), objectives (provide quantitative information) and subjective (provide
qualitative information.
• The most important are:
General objectives: Demographic (age, sex), Socio-economic (income, education) and
geographical (country, nation)
General-subjective: Consumer personality (leader, introverted...) styles of
life (activities, interests, opinions)
Specific-subjective: sought advantage, attitudes, perceptions or preferences of
consumer regarding the brand, the product or the service.
Específicos-objetivos: Tipo de consumidor (grande, medio), tipo de uso, fidelidad, tipo
purchase, purchase situation, place of purchase, etc.
Market segmentation and positioning strategies
Once the target market segment has been defined, we must choose the strategy that
we will carry out based on our market segmentation:

Concentrated marketing:
All efforts are directed towards a single market segment where a goal is to be achieved.
leadership position. Its main drawback is the risk of focusing on a single
product or market, and its advantage is that it implies lower production costs and
marketing.
Market segmentation and positioning strategies
2. Differentiated marketing:
A different product is positioned in each of the most attractive market segments.
the advantage of this strategy is that it increases sales and decreases risk, although at the cost of
a higher cost of production and marketing.

3. Undifferentiated marketing:
Segmentation is not done and the same product is offered to the entire market. It is recommended in
very changing markets.

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