Segmenting the Market
How to Break Up Any Market for Optimal Results
Segmentation occurs when an organisation wants to break up an entire market into several smaller parts or submarkets. These smaller submarkets are referred to market segments. This is a desirable thing to do for a couple of important reasons.
Firstly if you choose to mass market to an entire market, almost invariable you put yourself in direct competition with the market leading, major multinational companies that have enormous resources, personnel, capital and existing networks and market posture, which for smaller firms will be difficult to compete against.
The second key reason to perform market segmentation is that as you break up a market and different niches emerge, what is often found is that the needs of smaller, emerging niches may often be well aligned with the capability of individual, smaller firms. ?In addition these smaller niches often are not as obvious to other market players and consequently attract less direct completion especially from larger players because of the comparatively smaller dollar size of those market niches.
There are a number of criteria that can be used to effectively segment a market.
1.?Demographics: The criteria that describe the people within a market segment. For example: age, gender, education level, level of disposable income, marital status, cultural background and religion are all descriptive demographic elements.
2. Psychographics: The criteria that look at how people feel about certain things. It looks at the beliefs they hold, what their attitudes towards different issues of the day are and the values and systems of belief they hold, that drive those beliefs and likely behaviours.
3. Behavioural: Ultimately peoples? demographics and psychographics will drive their actual behaviours. What they do, when they do it, how often they do it, where they chose to do it and hopefully even some insight into why they are doing it in this way.
This seminar will explore segmentation in detail and provide both the theory and real world examples of how any business would go about segmenting their own market space to provide a number of possible market segments that may potentially be attractive to the business to pursue.
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