Segmentation

This week was all about market segmentation. Segmentation is a way of dividing a market in to specific sub groups, this can be done by…. Hair colour, age ,gender, religion ect. As well as looking at segmentation we looked at “profiling” this is when we look at the overall factors that determine how the customer is and acts. Marks and Spencer uses profiling to help them determine what products to stock in certain stores. They look at things such as what each customer buys and what sort of products they buy for example is it the” gastro pub” range or is it there “wise buy” range. They would then segregate all those people who purchase food into different sub categorise, this would enable them to promote there up coming promotions easier to there target market because they can tailor what vouchers each customer receives dependant upon what they purchase.
STP marketing
S- Segmentation (a group separated in to sub categories)T -Targeting (type of group they want to target)P -Positioning ( How do I market my product across to the specific target audience)


Why do we use segmentation?

We use segmentation because it helps break down the market into key sub categories which can then be further segmented into smaller categories. This all goes towards helping us know how to advertise to the correct target market. It also helps us identify customer needs so we can Better match them, it also help to keep customer retention this will then lead to enhanced profits for the company.
Business to customer segmentation uses the cluster analysis as a way to segment there potential customers. Cluster segmentation takes into account the following…

Size of the group you are targeting to- the bigger the target group the more likely it becomes the company will sell more products

Involvement - how does the target audience involve themselves with the product, this helps segment them within the market. (what type of milk do u drink, organic skimmed etc)


Ability to pay - can the target market afford the product or do they need to save for it.


Interest/attitudes- how to advertise to the target group for instance do they use the internet watch TV or listen to the radio.


This diagram is an example of how market segmentation works and how is overall goal is how to market to wards the customers
the video below shows Prof. Malcolm Mac Donald live on the essential of Market Segmentation for making your company successful in business.

An example of a segmented product being advertised to a specific group

This is Mark Hill Mini De-Frizz Cleansing Shampoo 75ml is a normal shampoo but it has been created specifically for people with frizzy hair it is aimed at meeting the needs of that specific target group, which relates back to what I said about segmentation helping to identify customer needs.