What Is Segmentation Analysis And How Is It Done?
Segments are known as groups or sections. In marketing terms, we use segments to separate the market with similar types of characteristics such as common interests, needs, lifestyle or even demographics. The objective of market segmentation is to identify which groups of consumers would be the most profitable or which would have the most potential when it comes to your business.
What are the types of segmentation out there?
1. Usage Segmentation - This is where we determine segments based on the usage of others. For example, we can assume that adults over the age of 55 may not be as tech-savvy as those younger than 55 years of age. But note that assumptions do change over time, don’t forget to keep updated!
2. Cluster Analysis - Knowing what your customer prefers and their thoughts before making a purchase fall within this segment
3. Needs-based Segmentation - This is a concept on where the market is based on customer needs. This is where we make products or services to sell rather than the other way around.
How is segmentation analysis done?
The first step is to understand your market. There’s nothing more important than getting to know the people you’re trying to engage with. Try your best to narrow it down instead of catering to a wide range of people where half of them may not be interested in what you’re trying to sell.
Second is to look for micro markets. As mentioned above, narrowing down your markets are essential. This helps cater to them more personally. For example, let’s say you’re producing music that you’d like to sell. Everyone listens to music, but making jazz would cater to a specific group of people, most likely adults above 50, same goes to hip-hop and rap that would appeal more to teenagers and young adults. It is important to know your audience well.
Lastly, determine the best market to target. Because you’re running a business, you wouldn’t want to blow your budget catering to everyone who you may think would be interested in your product or service. Be wise with your decisions and determine the best market to target. This ensures that you’re speaking to the right audience instead of bluntly talking to a wall with no outcome.
Here at Chamrun Digital
, we will assist you in the entire process of getting a segmentation analysis of your company’s target market.