Segmentation Flashcards
Evaluating Segmentation Scheme
Market Segmentation
Gathering prospective buyers into subgroups or segment with common characteristics. To better understand their customers and design tailored marketing strategies.
“A company can’t be all things to customers. It must choose a segment to serve.”
Essence of Market Segmentation
“It’s not smart marketing to go after the whole marketplace because the smart marketer or smart company will try to find out what different customers might like and decide which group they can serve best.”
Mass marketing
All customers are treated the same
One-to-one marketing
Each customer serves as his/her own segment
Process of Segmenting the Market
- Define your market
- Segment your market
- Understand your market
4. Create customer segments
5. Test your marketing strategy
Types of Market Segmentation
I. Demographic Segmentation
II. Geographic Segmentation
III. Behavioral Segmentation
IV. Psychographic Segmentation
Customer analysis methods
A. Cluster analysis
B. Managerial perspective analysis
Cluster Analysis
Data-driven and statistical method to group segments. The goal is to segment customers based on measurable factors using algorithms or software.
Managerial Perspective Analysis
Decision-driven and focuses on the practical, strategic aspects of segmentation. Which segments are actionable, profitable, and aligned with business goals.
Segmentation Touchstones
Criteria used in evaluating a good market segmentation:
- Data to Identify Segments
- Data to Access Segments
- Profitability
- Fit with Corporate Goals
- Actionable
- Considers Business Expansion
Segmentation Strategies
- Breadth Strategy
- Depth Strategy
- Tailored Strategy
Breadth Strategy
- Reaching multiple segments
- Knowing your segments and offer tailored products/services for each of them.
- Ex: Amazon
Depth Strategy
- Serving one segment well
- A flour company
Tailored Strategy
- Customizing for segment
- Ex: Coca-Cola
