Market segmentation is one of the initial marketing strategies that ensure a smooth and actionable flow of marketing decisions in your business. This article guides you through the basics of market segmentation as well as provides tips and strategies for its successful implementation.
Market segmentation is the process of categorizing potential and actual customer base, into various categories such as age, sex, location, preferences, income, etc. This ensures better targeting, increased ROI, conservation of marketing budget, and aids in broadening the product range and variations.
For example, a shampoo may be sold in sachets, tubes, or bottles, targeting different income groups. Similarly, most bigger fast food chains sell various local flavors for different countries they operate in to cater to the flavor palette of the region. Selling a product with different scents, such as deodorant, is appealing to segmented market based on their preferences.
Market segmentation helps organize a businesses’ activities from production to promotions. Targeting should be the first step before starting any kind of marketing process. We have talked about this point in depth in our detailed article about targeted marketing as well as in our guide to creating and running marketing campaigns.
Market Segmentation clarifies your market’s needs. Targeting is where and how your budget should be applied based on the market segmentation. Segmentation is also greatly helpful for individual marketing campaigns, as it can guide you on how to apply various campaigning strategies on different demographics of customers.
Segmentation can be made on the basis of one or more of the following:
This includes variables such as age, gender, level of education, level of income, family status, etc. This is the most popular type of segmentation as it helps businesses of all sizes and types to organize their audience into smaller and easier segments.
Geographic segmentation, when done on a wider level, becomes cultural segmentation. Geographic segmentation can consist of anything from suburban to international level. For example, larger fast food companies serve local flavors of their products in each country they operate.
Behavioral Segmentation relies on learning a buyer’s existing purchasing patterns to divide them based on factors such as retailer preferences, usage occasion, purchase frequency, etc.
Psychographic Segments consists of divisions based on social or personal characteristics such as lifestyle choices, interests and opinions, personality, values, etc.
It is important to know what your market is before deciding what part of it you need to market to and how. Conducting proper marketing and industry research with adequate research tools and strategies is the first step towards effective segmentation.
For local businesses, smaller criteria such as demographic and psychographic data could be valuable.
Next step is to gather data about your potential customer base. This can be done online or offline with marketing strategies and online tools like MyBestSegments, USA GOV statistics, or traditional questionnaires, surveys, and focus groups.
It is best to express the number in a relative term like in percentages or a pie chart. You should focus on marketing to the segment which is most likely to purchase the products/services as initial testing.
Segments, especially those based on behavioral and psychographic tendencies, are more likely to be dynamic in nature. It is advised that you keep updating and revising your marketing segments when necessary.
Data should be presented in relative and quantitative terms. Data from various segments should also be comparable to each other, in case the need for grouping arises. For example, if people from a different geographical location move to another place and their consumption habits are changed, the data between the two should be comparable such that now they can combined into one segment.
It is advised to appeal to the beliefs and lifestyles of each individual segment. The customer should ideally derive a sense of belonging towards your brand, which is achieved mainly by appealing to their belief, lifestyle, and cultural choices.
You should keep the number of segments to a number as low as possible so that the process of segmentation becomes easier and actionable. For example, suppose you have two segments with people who are interested in sports and people who are active at gyms. You can combine them under one category as people interested in physical activities.
Marketing Segmentation, when done correctly, could be the key to a long chain of successful and profitable marketing decisions and increased ROI. Not only does it help target your customer base, but helps in every aspect of decision making for your business. Therefore it often becomes important that all personal and professional efforts are put into its planning and execution.
Symphysis believes in marketing from the ground up. With our team of dedicated experts we can help in locating your ideal market, segmentation, campaigning, search engine optimization, and creating your own successful brand. For more information call or text @+1 (425) 390-4738 for a free initial consultation
We have written about various marketing strategies and tools in our previous articles, however there are certain distinctions when it comes to marketing for small businesses. These may be budgeting limits, limited area of operations, and difference in targeting and potential market. This article specifically guides you through marketing strategies and techniques for small businesses.
How is Marketing for small businesses different from other types of marketing?
Marketing of any kind involves attracting your potential customer base to purchase your products/services. There are various factors to be kept in mind such as marketing mix, analyzing your industry, analyzing your competitors, targeting, advertisement, etc.
These are important in cases of all large, medium, and small enterprises. However there are some crucial difference when it comes to actual marketing between small and medium, and large enterprises. These include:
Best marketing tools for small business.
Here is our list of top picks for best online and offline marketing tools for small businesses. Click here for a more comprehensive list of marketing tools.
Online marketing for small business.
Online marketing is a modern day competitive necessity. Even for small businesses, it has become important to maintain a stable digital presence. With advertising services like Facebook’s local market listing, it has also become easier to target and advertise specifically to your ideal potential customer base.
Apart from online advertisement, there are two other major online marketing strategies: SEO and Social media.
Search Engine Optimization is a sequence of strategies and methods used to by a website so as to increase its search ranking. For example, an owner of a bakery in Seattle would optimize their website content to appear in searches for "Bakery in Seattle." There are various methods and techniques of search engine optimization listed in our detailed article Search Engine Optimization.
Social Media is another excellent way to maintain an interactive customer base. Posting about current trends and connecting to your customer base online can help improve your business’s goodwill and even attract more customers. You can also use it for sales promotions or Pay Per Click (PPC) advertisement.
The most important points are to understand the dynamic of your local market, change and accustom to the needs of your audience as necessary, offer products of some customer value, and market to potential buyers only. Do not let the failure stories discourage you since entrepreneurship is all about facing and beating challenges. Once you understand what works for your market, marketing strategies become clearer. However in case of higher growth prospects and more complex market structures, professional assistance is recommended.
We Can Help!
Symphysis specializes in market structure and strategy. Every day we meet clients from around Greater Seattle for one-on-one training and consultation. Our marketing services extend to businesses of all sizes, family and enterprise. For more information, call or text @ +1 (425) 390-4738.
Formulation of a strong and successful marketing plan is of utmost importance for any marketing campaign to be a success. Marketing mix is a tool used to formulate such strategies that yield all-round, long term results.
Marketing Mix: Definition and Importance
Marketing Mix is a guide which can be used to form successful marketing strategies. It was developed to ensure an all-rounder approach before forming marketing tactics. The four Ps (Product, Price, Place, and Promotion) cover all functioning areas of a business, hence this tool helps businesses take a more comprehensive marketing approach.
It can be defined as the culmination of the major forces of market, namely product, price, place, and promotion. It helps achieve your marketing targets, as marketing mix functions as a monitoring variable to such goals by defining a table of progress, divided under relevant heads. For example, place mix can be used to monitor how far the reach of your product is physically, and how the expansion of the same is going.
The Four Ps of Marketing
Product is any good that a business offers for sale, or any services it is ready, willing, and qualified to provide under such circumstances deemed contractual by expression or conduct. In other words, Product is anything, real or psychological, that a business is ready to provide for monetary gain. As a marketing Mix, Product is an essential element as it is necessary to understand the product, and therefore its market conditions for any business to go about a successful marketing campaign.
Pricing decisions affects a lot of variables, from directly affecting profit margins and gains, to indirectly affecting growth, promotion, and everything up to the survival of the business. Under oligopoly market however, there is only minimum pricing liberty. Any price fluctuations and a business is bound to lose or gain customers immediately, at the price of lower sales or lower profits (respectively). Therefore a concrete understanding of the type of market along with knowledge about the industry and competition is essential before making pricing decisions.
Physical availability of the product is also very important. It is basically following the concept of being ‘at the right place, at the right time’. Ideally Place Mix should define where your potential customers are most like to wander into; this includes online shopping portals such as Amazon.
Through our previous articles we have always emphasised on the value of offering superior value as the key element of promotion. Promotion is basically a culmination of activities undertaken to acquire market share. Various methods such as advertisement, Public Relations, sales discounts, etc. are included under promotion. Promotion Mix looks to guide these activities, such that maximum ROI is obtained from the promotional efforts.
The Marketing Process (How to use Marketing Mix to your advantage)
To form an effective Marketing Mix that suits the requirements of your business and yields maximum results, we suggest taking the initiative for careful and constructive planning. This includes the process of industry analysis (click here), competitor analysis (click here), and advertisement analysis, as well as defining your marketing goals under the subheads of Marketing Mix and keeping a maintained checklist for the same. When implying Marketing Mix as a marketing basis, you should ask yourself the following questions:
Upon answering the above questions, the best thing would be to lay down the respective goals in relevant headings and proceed with it.
Any market form is dynamic and ever changing, therefore a limitation of Marketing Mix is rigidity. You must be prepared for such changes, expected (in accordance to past changes in the industry) or unexpected.
While Marketing Mix is a comprehensive marketing tactic, it has some of its flaws that should be accounted for beforehand. It is a good approach for Startup businesses (click here to learn more about startup marketing). It should be used as a guide rather than as a rigid to-do list, describing your long term goals while dealing with variables as they come along.
We can help!
Symphysis believes in marketing from the ground up. With our team of dedicated experts we can help in locating your ideal market, segmentation, search engine optimization and create your own successful brand. For more information call or text @+1 (425) 390-4738 for a free initial consultation.
Definition and Importance of Advertisement
Advertisement is a part of the promotion mix(1), along with variables such as PR or Personal Selling (Door-to-door selling), which aims at informing customers and inducing potential customers to purchase a firm’s products or services. It is impersonal and constitutes an identified sponsor. In other words, it’s a brief presentation of the appealing characteristics of your product or service, to inform general or specific public about the availability of your product.
Advertisement is an essential strategy to follow in today’s extensively competitive markets. The main difference that convinces someone to choose a particular brand over another, especially for startups, is creating a product of superior value (psychological or real) for the customer. Advertisement aims at both of these aspects, by informing the customer about the product’s actual superior value, and attempting to resonate in their minds with a catchy and indulging presentation. You can read more about startup marketing here.
Various Types/Methods of Advertisement Media
The most common and effective advertisement media are:
The most popular method of advertisement is Physical media, such as newspapers, pamphlets, and brochure distribution (Print media). As well as billboards, vehicle advertisement/vehicle graphics, and digital billboards (Outdoor advertisement). Physical media is suitable when the area of distribution is limited but the product has rather generic use, so that each person who stumbles across the advertisement is a potential customer. These are widely used by local businesses. However, these are adopted by larger companies to convey such generic products, primarily because it often leaves a long-term effect in the viewer’s mind due to its physical nature.
Different types of Physical Media are-
Digital media has become the most convenient, effective, and profitable method of advertisement in the modern age due to its never-ending growth of customers. There are various methods to do this, such as running ads on social media like Facebook or Twitter, direct emailing (subscription based), posting relevant content on your website (such as blog or vlogs), and attracting SEO(2) based customers, etc. The dynamics of digital media are ever-evolving with altering algorithms and updates. However the major player for a successful advertising campaign to be retained is its relativity to the target audience. The campaign must maintain relevance and evolve alongside its target audience. Marketing itself is all about keeping up with the dynamics. Developing a good social media community is also an effective and necessary digital marketing method to build a strong, organic customer base.
Another popular and effective way of advertising is broadcast media. This primarily includes radio and television. Relevance is of the utmost importance in broadcast media. For example, you see toys being advertised on children’s channels mainly and not on news channels. Similarly, sports gear is advertised on sports channels. This presents the concept of Targeted Marketing(3) and its importance in a clearer sense.
How to target your ideal audience (Targeted Marketing)
For a detailed article on Targeted marketing click here
The most common and important question about Advertising following "How to market" is "who to market to." Advertisements on Billboards and Flyers do not have a specific targeted audience, everyone sees those advertisements and hence they are mostly used for everyday products such as grocery or technological products.
However that is not commonly the case with businesses and Startups. The product/service offered may be of any specific usage for specific audience or even a niche product with a small audience. It is preferable to identify the potential customers who are likely to buy the product and advertise primarily to those consumers to increase return on investment. For example, pet supplies to people with pets or toys to children.
This is where targeted marketing comes into play. It is the process of identifying the demographic most likely to purchase your product and advertising primarily to them. For example since kids are most likely to demand for toys, ideally ads for toys are mostly run on kids' TV channels. However nowadays the most effective Targeted marketing tool has become social media like Facebook and Instagram. By choosing to show your ads to people following specific interests, social media sites makes it way more convenient and cheaper to target your potential customer base.
We have mentioned in the previous articles from our "Marketing How To" series that marketing strategies are almost always dynamic, subjective, and need to be targeted. A non-targeted marketing plan, except for generic products, is inevitably destined to fail. To understand advertisement you first need to understand your specific market's needs and wants.
We Can Help!
Symphysis offers marketing consulting for businesses of all sizes. With the right analytics and targeting process, we can help develop a brand persona that attracts your target audience. For more information call or text @ +1 (425) 390-4738