Market Segmenting

‘Market segmentation’ is the predecessor to ‘target marketing’; a former buzz-word in business circles. It was a buzz when it was first realised and implemented by the big businesses, it is now a reality of marketing in any capacity, perhaps more importantly, small and medium businesses on much more limited marketing budgets.

If you are thinking about marketing more effectively and at lower cost you must segment your market.

Every brand, product and service must segment its market to expect to connect with its customers. Segmenting allows the business to understand the different types of customers that the brand attracts and use this information to market more effectively and efficiently.

Proper market segmenting and implementation of target marketing will see your business have more sales and invest its marketing budget wisely than if it had not segmented. This leads to higher profits. It’s a no-brainer.

Markets can be segmented into infinite types of segments. This is how “new markets” are found; by looking at the market differently.

You can divide your market into any pattern that you can find with your customer base, group them and create a way to appeal to their unique needs.

The most common market segment is found through demographics.

• Gender – Females – Ladies nights
• Age – Baby boomers – Senior discounts
• Income – High income earners – Exclusive events
• Family types – i.e. Large families – Family packages

Market segments can be identified geographically if you can identify unique differences in the needs of markets from different locations; countries, cities or neighbourhoods.

Psychographic market segments are based on the differing personalities, behaviours, attitudes, values and lifestyles of your customers.

Market segmentation does not have to be so complicated to the point where you analyse customer’s belief systems for most types of products. It can be as simple as gender. For example, take the sugar free soft drink market. Coke Zero is marketed at males and Diet Coke is marketed at females. You will see Coke Zero promoted at sports venues and during sporting broadcasts. You will notice Diet Coke promoted predominantly at shopping malls and in women’s magazines.

This is the purpose of segmentation, to target and reach specific markets. However, you do not have to create different products to reach different market segments.

Market segmentation will require you to market specifically to the segments that you choose to pursue. This means that you will change marketing messages to appeal to particular people. For example, an investment scheme can promote:

• “Secure, peace-of-mind investment for your retirement” to the 50-60 year old market.
• “Maximise your savings in our reliable high performance fund” to 30-40 year old investment market.

These age segments have different priorities in their finances, yet a single investment product may be suitable for both markets.

To segment markets you must research your total market and the possible segmented markets.

Reduce Your Marketing Costs

In tough times, the mentality for most businesses is that unnecessary spending must be cut. To the demise of many small businesses, it is the marketing budget that is cut and marketing stops.

Marketing is a necessary investment for business because it is designed to keep work coming in. The businesses that continue to market through a recession or depression are those that make it out alive.

What is a business to do?
Answer:
- Reduce marketing costs
- Target customers

Because of financial constraints in these times, spending must be cut; including marketing spending. But that does not mean your marketing should stop. Instead it means cut the marketing wastage and market to where customers are looking for you.

The availability and reliance of businesses & consumers on the Internet makes a marketing budget stretch much further. Marketing on the Internet is incredibly cheap if you know how it works. You will have complete control of your spending and can monitor the returns very accurately.

With a targeted and well researched marketing plan that implements a mixed media marketing approach; using both the Internet and traditional marketing methods, you will reduce your marketing costs and improve the quality of your leads. This means more conversions per advertising dollar and more profits.

All of this can be achieved through marketing smarter and taking a mixed media marketing approach. Perform targeted marketing online and offline.

Those businesses that rely on advertising and promotion with traditional mass media such as newspaper ads, radio & TV commercials and placements in directories will find these times extra difficult. Advertising through these methods are increasingly expensive and are less effective than they once were. They are simply not targeted enough.

It is going to take a recession for these businesses to realise that the Internet is where it is at! It is the place where marketing is cheap, targeted and effective. What’s more is it’s in your control. – It is probably these promises that sound too good to be true that scare businesses off Internet marketing.

The 70/30 rule should be applied to advertising online and offline. Invest 70% of your marketing budget online and reduce offline spending to 30% of the budget. Your advertising will be much more targeted with minimal wastage because of the online focus and restricted offline spend which will be limited to directories and the odd radio promotion.

Reduce your marketing budget. Do not stop it altogether. Market smarter. Mixed media marketing is the solution.

Online marketing maybe the one revelation that gets your business through the tough times.