Why is segmentation so important in marketing and how do other aspects of marketing effect it?

[smiling_angel_86]

I just need a general understanding of segmentation, the basics, and the different areas of it and how it interacts with other aspects of marketing.

[Dav]

In short, marketing is communications between the company and the market to make customers interested in the products or services. It supports sales efforts and the starting point of marketing is the target market. Because one product or service cannot satisfy everybody's needs, a company needs to segment the available markets, and target a specific segment which its product really suits. For example, you have to differentiate the rich and the price sensitive, male and female, adults and kids, gays and straights, etc, and you have to know "who" would possibly buy your products or services. Without knowing the different segments, you won't be able to promote your product to reach the right group of potential buyers.

Segmentation is divided into four major categories:

Geographic : Region, city size, density, climate

Demographic : Age, gender, family size, family life cycle (single, married, with or without children, etc), income, occupation, education, religioin, race, and nationality

Psychographic : Social class, lifestyle, personality

Behavioural : Occasions (regular, special occasion), benefits (quality, service, economy, etc), user status (first-time user, regular, potential, etc), usage rate (light, medium, heavy user), loyalty status, readiness stage (unaware, aware, informed, interested, intending to buy), attitude toward product.

Segmentation should be one of the first thing you have to do before you plan and execute other marketing activities. By segmenting properly, you will be able to decide what sort of marketing activities are necessary, where to advertise, who to contact, etc. Hope this helps.

[Holly O]

Dav's answer could not be better. Very clear and concise. This is precisely what segmentation is. . .

Dav is describing segmentation for positioning your product and getting new customers. There is also segmentation you can do, once you establish a customer base. You could send direct mail pieces to your existing customer who spends less than $100 a year with you offering them an incentive to spend more while sending a different direct mail piece to your customer who spends more than $100 a year with you a free thank you gift next time they visit. Things like that.

Good question!