Market segmentation for real word business success
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Market segmentation involves dividing a large customer base into subgroups in order to better meet their specific needs. This allows companies to fine-tune their product, messaging, promotions and strategies. Some benefits of market segmentation include helping to plan product roadmaps by understanding customer segments, embracing niche marketing by focusing on smaller customer groups, and setting more meaningful marketing budgets aligned with segment goals. While complex, market segmentation can help organizations make and save money when done through a thoughtful planning process with expert assistance.
Market segmentation for real word business success
- 1. 11 Main Street | Southborough, MA 01772 | 508.691.6004 | Info@ResearchRockstar.com www.ResearchRockstar.com A Research Rockstar Article Market Segmentation for Real-word Business Success Market segmentation is all about sales and marketing ROI. The premise is that to maximize success with a large population of customers, it is best to divide it into logical subgroups. By dividing one large, generalized market into subgroups, you can fine-tune your product, messaging, promotional, distribution and related strategies to meet the specific needs of unique customer groups. Segmentation models vary from basic to complex and the approaches to developing and applying them is a topic for an entire book itself. But here are three examples of the very real benefits a segmentation model delivers: 1. Plan product roadmaps. Its a lot easier to craft a roadmap when you have internal agreement about the profilesincluding needs and behaviorsof the most attractive customer segments. If decision makers share a common view of what the most attractive segments are, and their emerging needs, planning new products and product improvements becomes a far more time and resource efficient process. Not to overlook the obvious benefit that customer-inspired product ideas are more likely to succeed. 2. Embrace niche marketing. Few companies can afford to compete with the big fish in the big pond. Instead, a segmentation model shows you how to be a big fish in a little pondor several little ponds. A segmentation project can be designed to identify, profile and select profitable niches. 3. Setting your budget. Why let a marketing budget be set by something arbitrary, such as percent of sales? A segmentation model can provide a more meaningful, analytical approach. Given the size of attractive segments, and objectives for each segment (awareness/preference/market share, etc.), a strategic budget aligned with actual goals can be built. When you take this approach for the first time, you will likely find yourself investing less in some marketing programs, and more in others. These are just 3 examplesthere are many more. Indeed, there are many ways that a segmentation model can help your organization make money and save money. That said, actually creating a segmentation model is fairly complex, and success requires a very thoughtful planning process. Before you start, I strongly urge you to get assistance from someone who has experience with these types of studieseither a consultant or a market research agency. For those interested in learning more about market segmentation, please check out Research Rockstars new white paper, 9 Ways Market Segmentation Improves Business Success. Get the white paper at: http://www.researchrockstar.com/9-ways-market-segmentation-improves-business- results/
- 2. Page 2 About Research Rockstar Research Rockstar delivers training and staffing services to busy professionals seeking Market Research excellence. Our 25+ training classes are offered in both online and on-site formats. Our staffing services place qualified market research experts, covering temporary needs due to project fluctuations, maternity leaves or other staffing disruptions. For more information, and more market research articles, please visit www.researchrockstar.com Original publication date: August 2010