The essence of marketing lies in the ability to understand your niche and tailor your business around its needs. Simply put, marketing entails understanding your specific target clientele fully and providing goods and services that satisfy their precise needs and wants.
Market segmentation is a concept that helps to achieve these marketing strategies. Just like the word would suggest, it entails the division of a market into smaller units so as to efficiently serve them better. It can be done in various ways: Behavioural segmentation, geographic segmentation and psychographic segmentation. The benefits of market segmentation are insurmountable, and here’s why you should consider it for your business:
- It leads to maximum customer satisfaction
Market segmentation allows you to understand the needs of a specific niche. This means that the strategy will be extremely detailed and cannot be similar to any other. For example, if you are targeting a group of people in Lavington, you will need to understand their language, buying behaviour, beliefs and thought patterns. This information cannot resemble a target audience of people in Athi River. This is where marketing research comes in. It gets to the core of the audience and classifies their general characteristics. By understanding fully this target audience you will be able to satisfy them fully. In the long run, customer satisfaction leads to word-of-mouth advertising as well as generating brand loyalty.
- Improved profitability
Market segmentation is likely to improve the profits of the business. If you provide goods and services to a group of people that suits their beliefs and behaviour, you increase the chances of them being able to buy your products. On top of this, you will generate brand loyalty because the goods and services that you are providing fit in with the human wants that need to be satisfied by the audience.
- Efficient use of company resources
Market segmentation reduces the amount of wastage that is likely to happen when the company is not targeting any audience. By understanding exactly who you are targeting, you can utilize the required resources fully and save up on the unnecessary ones. Market segmentation helps you to avoid using resources that do not match the market needs. The company will be able to do away with ideas that do not make sense to a particular segment or are not bringing profit to their investments. This saves the company on money that can be used to re-invest elsewhere.
- Improves Product Development
Focusing on a specific market segment allows a business to provide goods and services according to the needs and standards of those customers. It allows the business to create and design future products that address the exact needs of that target clientele. This goes a long way in the growth of the business and subsequently in the number of sales that are made by that business.
- Market expansion
Market segmentation is very effective when it comes to expanding the market and increasing sales. Geographic segmentation makes expansion immediately possible. Once you are catering to a particular area as best as you can, you can expand to another territory. In the same way, if your behavioural segment is fully satisfied then it becomes possible to expand your business to another target audience.