Table of Contents

• Foreword
• The fundamental reason to segment the market
• The relationship between market segmentation and marketing mix

One of the ideas of customer-driven marketing strategy, you have to understand three steps of target marketing, they are: market segmentation, target marketing, market positioning. In this article you will know about market segmentation thing, because I only focus on it.

Watch my video version about this matter.

Foreword

Many companies have performed social media marketing, for example: Facebook marketing, twitter marketing, LinkedIn marketing, etc.

If you have tried advertise via Facebook, you see that you must choose your target audience, for example based on group they are join, interest, age, location they are lived, etc.

The question is, why you must limit your ads reach to your prospective market only? The answer is, for reaching the correct prospects. If your message is delivered to precise people, your chance to make conversion is higher.

Another reason is from budget perspective. If you try reach as many as people without considering their need or interest, the conversion is lower and you must pay higher amount.

So, to make sure the clicked ads convert to sales, you must make an effort to achieve high CTR and high conversion. It means your ad is delivered to correct audience, and the audience is willing to buy your product.

I recap for this section, classifying your prospects is fundamental thing to run a social media marketing.

The next section, I will completely explain you basic marketing segmentation theory.

The fundamental reason to segment the market

There are several reason, why you have to perform market segmentation, they are:

1. You must deliver very different messages and perform different approach to different segments of the target people.

2. When you found that there are some segments are reachable and their need is match to your solution.

3. By doing segmenting, you will focus perform marketing activities only to your target audiences ( reduce a market crowd by isolating them into a group ), as a consequence you will save your resources, such as: budget saving, efficiently actions, save human resources, etc.

4. By doing certain and proper approach to certain group of people who have similarity thing ( I will explain you later about types of segmentation ), making your message will be heard and responded.

5. Because you focus on your target market, the possibility of your message heard and make them pleased is higher than you run a mass marketing approach ( general marketing approach for all people ).

6. If you succeed make your target market delighted, it will drive word-of-mouth that is spread by them. You can read the power of word-of-mouth marketing in my previous article.

7. By segmenting your market, it will help you define and determine how you deliver your message.

The relationship between market segmentation and marketing mix

Just to remind you, you can read marketing mix explanation before continue reading this article for getting comprehensive understanding about this concept.

You have read and already known that basically there are 4Ps of marketing mix, they are: product, price, place, promotion.

After classifying your audience, you can define precisely your 4Ps marketing. See below for more insight.

1. If you have multiple-product to sell, you can deliver different product for different group of audiences.

2. You can define different pricing strategy for different target market.

3. You are able to put different place ( outlet, media, channel, etc ) for your product to reach your different target consumer.

4. You can perform different promotion method for your different target audiences.

Now you can see the relationship between them. The main goal to relate them is, focus to approach, engage, message, provide your product and solution to your target market only.

The more you focus serving your target market, the more they respond to you. This is the key.

Market segmentation definition

Market segmentation is an action. It contains several step of actions, one of them is categorizing the market. It is process that is used to segregate enormous types of market into certain markets, so that the target market can be reached with the product or service that correspond target market’s needs.

For the sake of simplicity, you can say: “this is a process for grouping people by particular criteria” or “audience categorization”.

After that you can target those groups, this is that we call targeting. The next marketing action is positioning. It means you perform some activities to put a good image in your target audiences or target markets.

I remind you, that this article is only talk about market segment, so I will explain targeting and positioning later.

Types of market segmentation

Market segmentation based on consumer (people)

1. Demographic segmentation.

It isolates markets into certain groups, such as: gender, age, race, nationality, education, income, family size, etc.

Demographic segmentation is very famous among marketers, because this is very powerful way and closely related to consumer needs. In addition to this, it is easier to test and measure.

You may see the demographic data especially in US for getting demographic data insight.

2. Geographic segmentation.

It segregates markets into different geographical area, such as: cities, countries, regions, and so on.

3. Psychographic segmentation.

It divides markets into several groups based on people’s position in the society, social class, personality traits, lifestyle, interest, hoby, belief, values, opinion, and so forth.

4. Behavioral segmentation.

The segmentation based on people’s manner, such as: attitudes, knowledge, response to a particular product or service, online and offline attitudes, actions, etc.

Can you do multi-segmentation? The answer is yes. For example,you can segment people into group with similar buying behavior (behavioral), similar interest (psychographic), and live in different countries (geographic).

Market segmentation best practices

According to basic market segmentation theory, if you want to achieve effective market segmentation, you have to concern the things below:

1. You have to clearly define your segmenting, state your segmentation based on your company objectives.

2. You have to make sure that your target market can be reached and make sure that you can delivered your product or service.

3. You have to validate that your segmenting is measurable.

4. You have to validate that your target market are large enough, so that it can be profitable enough.

5. You have to plan the appropriate strategy based on your differential segmentation, and run the the program for enticing consumers and serving them.

After defining market segmentation, then what?

Once finishing the market segmentation phase, you must perform another marketing action, namely differentiated marketing. Differentiated marketing is marketing action that targets different market segments with different treatments.

And, I will continue explaining the things that related to this, such as: targeting and positioning, later in the next article.