The key role of marketing is to understand the nature of the market. It should not be presumed that there is one product or service that meet all sections of the market.
Segmentation, targeting and positioning have been described as the core of strategic marketing. They are basis for marketing activities and the essence of marketing planning.
As marketing managers, we need to understand the segments of the market and than target their individual needs, and the position the product appropriately.
The general definition of segmentation is that is is the art of defining meaningful differences between groups of customers to form the foundation of more focused marketing efforts.
In more simple words it is the process of identifying that different customers will expect and want different products or services. We should not try to design a product that "fits all", but look for specific types of customers - segments.
This focused approach can put a business in from of their competitors.
Lets look at some methods of the market segmentation:
Geographic segmentation
Geographic segmentation divides the customers in accordance to the place they live. Geographic segmentation should be the staring point of further analysis. This segmentation need to be further broken down into different areas.
Demographic segmentation
This segmentation loos at information we have about the customers. This will involve age, income, gender, economic status, family and education. This type of segmentation allows clear division that can be very helpful for other marketing efforts and strategies.
Psychographic segmentation
This type of analysis provides us with information on what customers want to do. This is closely related to their lifestyle factors. This allows determine what issues customers have and what is important to them. These will include workalike, social life, holidays, hobbies, shopping or even opinions.
Behaviour segmentation
In this segmentation the relationship of customer with the product can be evaluated. This could include finding out of how, when, how often and why customer would use the product.
Targeting
Many organisations do not have a marketing department, especially small businesses. They realise however at one stage that there is a need for it. Than, they are not able to go around it themselves. What gets in the way is the knowledge of marketing concept and building a marketing strategy.
Most of the professional marketing guidance is based on the 4Ps and 7Ps, identifying the customer base, determining their needs and meeting those needs. There need to be a plan of action to meet those objectives.
To help those organisations marketing managers need to really understand what the business is and what they do. If the business in its core is not understood you will not be able to identify the customers for it.
Analysing these customers can happened in different ways. You can research them and find out more of the type of things they are looking for. Than you can determine the appropriate tools to meet those people. The power of message is also important. We need to know what speaks to those customers to be successful as much as possible.
Than the next step would be to create a marketing plan. Many times the organisations do not have a formalised marketing plan.
The marketing plan would start from analysis of the business strategic objectives, who the customers are, what they need and what motivates them to buy.
Very often SWOT analysis is performed as well as the evaluation of their competitors. We not necessarily want to copy what the competitors do, but learning from it.
It is essential that the marketing plan ties up to the business plan and the business objectives. It can become a crucial way of improving the business performance.
Segmentation is also something many organisations do not do. But sometimes the product range offered for sale will not be relevant to everyone. There are certain types of people, who have their certain types of needs. Therefore the segmentation and the analysis is done.
From there there is a true possibility to target those group of customers with appropriate messages and marketing tools.
A crucial part of what the marketing management will also do is to assess the value of marketing within the business. We have to be very keen to test and measure what we do, There are variety of methods to do that. With the increasing popularity of digital marketing, we can nowadays use google analytics for example to assess where the leads are coming out.
Multi-channel marketing also becomes more and more important, using different channels to attract the customers. It is therefore, never as it has been before, important to understand the business, its objectives and goals. It has become extremely important to make our messages more personal within the groups of customers and tell them that you have exactly hat they are looking for.
Digital and online marketing is going to develop even further what what it is today. And also, there is still need for use of PR, advertising and e-mailing. Generally, business-to-business marketing is still using the traditional media.
By applying segmentation analysis, the organisation can identify the different needs of the customers. Organisations must be specific and identify the customer groups within the market.
There is number of different methods of targeting:
* Niche strategy (concentrated strategy) - only one segment is chosen, where it is considered the most important and most return of the investment. This approach is also very time effective, because generally one message will speak to the customers of the segment. However, many marketing specialists believe that it can be a risky strategy. This is because the segment may be too small or not interested in the product at all.
* Differentiated strategy - in this method two or more segments are targeted. There need to be money, effort and time invested to different approaches. However this method is less risky them the niche strategy, because it divides the risk among the different segments. If there is one part that grow there is another one which could be declining.
* Undifferentiated strategy - this method will approach the whole market and customers within the market.
The different strategies are important further to correctly positioning the product in the market.
Positioning
Careful positioning is necessary. It is the process of gaining the understanding the market place and determining how the products and services meet the customer needs. It is also important to do a comparison of the particular product brand with other products which exist on the particular market. It could be, that the product can or should be adjusted to make it competitive and stand out. These evaluations will highly impact further marketing efforts, from communications methods, pricing, packaging, etc.
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