Market segmentation and targeting are the processes of identifying a company's potential customers, selecting which customers to pursue, and creating value for the chosen customers. It is accomplished through the process of segmentation, targeting, and positioning (STP).
In modern marketing, the STP marketing model (Segmentation, Targeting, Positioning) is a well-known strategic approach. It is one of the most widely used marketing models in practice, with marketing leaders crediting it for effective, streamlined communications.
As a Business Manager, the concept of customer targeting and segmentations must be known to you.
Customer Segmentation
Segmentation, as the name implies, is the process of segmenting the market. It is the process of fragmenting your target market into different sub-groups. The criteria that are considered while segmenting your audience are-
Demographic- The most common type of segmentation is demographics. It entails segmenting your market based on a variety of criteria such as age, income level, gender, occupation, marital status, religion, education, and social class.
Psychographics- the goal of psychographic segmentation is to understand why they buy. A target group is segmented in this strategy based on various factors such as attitudes, opinions, personality type, values, interests, social status, personality traits, political affiliation, and so on. This type of segmentation is common in niche markets. This group's members prioritize quality and brand recognition over price.
Geographic segmentation- Geographic segmentation entails categorizing your market by state, country, region, city, neighborhood, or province. Most brands that sell seasonal products use geographic segmentation to determine where their target audience is located.
Customer Targeting
Customer targeting is the second part of the STP model. This stage decides to identify the most attractive customers that are valuable to carry out a comprehensive marketing campaign for the brand found. Customer targeting is again based on a number of factors, which include:
Distinctiveness: Almost every segment must be distinguishable from the others.
Accessibility refers to the ability to reach a specific demographic through appropriate promotional activities and distribution channels.
Measurability: Will the target group be easy to identify and measure?
Profitability is the most important factor because it is at the heart of your business. The segment you target should be able to generate revenue and profits for your company now and in the future.
The final step in customer segmentation and targeting is brand positioning. Industry-integrated MBA emphasizes brand positioning as an important step in brand positioning. At this juncture, you being a Business manager must ensure that your brand is in the right place in the minds of your target customers. Your customers should be able to tell your products or services apart from those of your competitors. You must focus on solving a problem or providing a benefit to a customer to gain a competitive advantage. Only by doing so will you be able to establish a distinct market position or value proposition.
Comments