Marketing Segementation

One of the critical aspects of marketing management is identifying the target market and creating market segments with common specific wants and preferences where a business bases its marketing strategies and orientations.A group of individuals or organizations having similar characteristics causing them to also take on a similar product or service need is called a market segment. This term applies to consumers who are classified into groups according to the use of a similar product or servic.
Why a Business Needs Market Segmentation
When the market is treated as a homogeneous group of individuals where the same marketing mix is offered to customers market-wide, it is called mass marketing. It employs mass production, distribution, and product dissemination.
However, since every individual has personal preferences, it is quite impossible to satisfy all customers by giving them equal treatment and offering the same products and services. A business has to be sensitive to the needs of the customers. If not, a competitor might take advantage and address the need of your customers that was not fulfilled.
On the contrary, when a company understands and recognizes the differences of the customers’ needs and does not offer the same product or service to everyone, this is called target marketing. So, the diverse market is then classified based on various factors and considerations.
The process of dividing the market into classified groups is called market segmentation. A company is able to better satisfy the needs of its customers when they are properly segmented depending on the need and commonalities of the customers.
Criteria for Segmenting a Market
A true market segment meets the criteria that are required of a company. Effective market segmentation is a product of proper categorization of different customers. Accessibility is one of the criteria which means that the target market should be closely available to the company. This includes the ease of communication and distribution channels.
Another factor that should be considered is that a market segment should be identifiable. This means that the different characteristics and similarities of the segments are determined so that one market segment can be distinguished from another.
A market segment must also be substantial. A high volume or production must satisfy market segments that are sufficiently large enough in order to properly distribute the product to them. The availability of the products must considerably compensate a large market segment for an increased profitability.
Apart from substantiality, durability must be considered in a market segment. Since people have changing preferences, it is better to cater to a market segment that does not alter too quickly in their tastes. The segments must keep a sense of stability in order to minimize frequent changes.
Lastly, market segments must be evaluated on their unique needs. They must have differences in their responses to the marketing mixes in order to justify the various products that are offered. To illustrate, let us use bath soaps as an example. Some people prefer those with whitening components while others would go for the moisturizing effect. Even others have unique needs on the kind of soap they use.
Bases for Consumer Market Segmentation
A large, diverse market is classified into different factors but these factors are consistent in a particular segment. For a consumer market, there are four main categories in segmenting the market. One of which is geographic segmentation where regional variables are considered.
Examples of these variables are region, population size, population density, and climate. Some companies take advantage of selling suntan lotions in tropical regions such as Hawaii while other businesses promote fur coats in colder places like Alaska.
Demographic segmentation relies on variables like age, gender, ethnicity, religion, education, occupation, income, social status and family status and size. The customers are grouped basing on the particular need and tastes.
Psychographic segmentation classifies customers based primarily on lifestyle. So, the variables for this kind of segmentation are social activities and interests, opinions, values, and attitudes.
Lastly, behavioral segmentation groups customers according to their behavior on a certain product or service. The factors considered are the customer’s readiness to buy, sensitivity to price, brand loyalty, usage rate, benefits required, and sometimes when occasions take place. More often than not, behavioral segmentation serves as a good initial basis for segmenting the market.

Marketing Management Introduction

Marketing management is a broad scope of the study of marketing focusing on the practical application of the techniques and marketing activities of a certain company or business. This business discipline encompasses marketing planning and strategy, orientations, and processes needed in attaining company goals by providing value to clients. Since it has a wide coverage involving all factors required to satisfy customers, marketing management must be all-pervasive and part of every employee’s scope of work, from the subordinates to those in the higher management.
Marketing Research and Analysis
A business firm must be able to conduct a marketing research and create an analysis of the market as these processes help in the understanding of business goals and the way the market operates. Structurally, marketing analysis is conducted with focus on the customers or potential market, the organization or the company, and the competitor.
In customer analysis, a very important aspect is developing market segmentation where various customers are categorized into different classifications. Marketing managers must be able to profile each market segment and classify them according to variables such as demographics, behavior, needs, and other factors to be considered in grouping customers. When the customers and potential market are properly segmented, it is easy to fulfill and satisfy their needs based on the factors considered for each classification.
The second aspect is to make an internal marketing analysis within an organizational structure. A business or company should be able to understand its core competencies and its capacity to compete with other businesses. This means putting into great consideration company resources and manpower, cost position in comparison to other organizations, and profitability of the company. Company analysis is figuring out how the business can thrive in a competitive market and the industry it functions.
Apart from developing detailed profiles on different market segments, competitors should also be studied in terms of strengths and weaknesses. A business that knows the moves and understands the trend of its competitor is able to get into the main competition and is not left behind. So, marketing managers must know how to analyze other businesses in the industry they operate in, considering factors such as source of profit, resources, cost structure, and product comparison among others.
In marketing management, research is very crucial in the process of creating market analysis. With marketing research, a company is able to gather the data necessary for accurate market analysis. There are two primary methods in conducting a marketing research. The first technique is called qualitative marketing research and an example for this is focused-group study. The other one is called quantitative marketing research which may be conducted through statistical surveys.
Marketing Strategy
In the field of marketing, once a business is finally able to adequately profile its customers and competitors, along with its competitiveness in a particular industry, marketing managers can design marketing strategies that are important in capitalizing on company profits and resources. Important strategic decisions in marketing are grounded on specific objectives such as that of maximizing revenue, market share, and level of profitability.
In attaining the marketing objectives, a company must determine the specific market segments targeted for the particular business. With a specific selection of target customer segments, company resources are maximized instead of being put to waste and revenue increases subsequently. Additionally, companies are also able brand their business with a key benefit that distinguishes the company from the rest of its competitors.
Organizational Management
A company that aims to excel in business must allocate time in developing and maintaining good marketing orientation. A business with market orientation puts utmost importance and focus to the customers. Marketing managers perform this in a structural process with the help of different departments within the organization. The marketing department can work hand in hand and coordinate with research and development team, engineering, operations, manufacturing, sales, and other departmental areas to materialize marketing schemes. Simply put, intra-departmental efforts and interaction help the entire company push its marketing plans.

Understanding customer needs

The essence of a business is all about their customers. A company exists because it aims to gain profit and the only source of such profit are the customers. All the sales activities, production, and marketing plans have a common objective and that is to attract customers to purchase their products or services in order to bring in money to the company.Surprisingly, not all companies know and understand their customers fully well. Some companies fail to take time to get to know their customers and relate to them.
The old adage that the customers are the lifeline of the business is indeed true. They define the business and the company highly depends upon their needs for most of the sales and marketing activities. The secret to a solid and successful business is to place your customers in the heart of the business and make them feel that they are the most important ingredient of your company. An effective way to do this is to find out what they want and understand their needs.
Customer Relations
The ability to reach out and relate to customers being the most important element in the business is the concept of customer relations. In this approach, the fundamental and powerful tool to use is communication. The goals of customer relations are to make the customer feel valued, identify possible issues and problems, and to find out emerging needs that may serve useful in future product developments.
When dealing with customers, you need to initiate the talk and encourage interaction. Ask them questions to learn if they are satisfied with the product or if there are any problems that they experience. They might also offer suggestions to make the business better.
Customers who complain about the product or service only mean that they are concerned about the way you conduct your business and they want you to correct it. Always take this as a challenge for your company to grow and improve.
Customer remarks should be heeded and paid attention to. Bringing up negative concerns is an indication that there are aspects about the way you deal with them that did not tailor to their needs. Follow things up with your customers regularly.
Customer Research
Understanding the needs of your customers will help a company define and create new market opportunities that greatly contributes to revenue growth in the organization. With the rapidly changing economy and dynamic technology, customers also observe a rapid change in personal tastes and preferences.
Customer predictability is not as conventional as it used to be. So, a company must conduct regular market research to be fully updated with the latest trends. With research, your business will be able to generate new and broader marketing strategies needed in the various marketing programs. New product creations can even be designed as an answer to changing customer needs.
Basically, the two types of customer research are qualitative and quantitative. Qualitative research is conducted through in-depth individual or group discussion with customers. Quantitative research is based on the use of standard questions or survey questionnaires where results are generated right away and easily studied or analyzed. Customer research is not just aimed at existing customers but also embraces potential target markets.
Doing Business with Custome
Customers who find it easy to do business with your company will come to understand that your business knows what your customers need and expect from you as their product and service provider. As a reliable service provider, your company and staff should be knowledgeable about your products and services offered. Customers expect to interact with business people who know what they are doing and the product or service they are promoting. Make sure your company representatives are well-equipped with the required product knowledge so they can quickly respond to customer inquiries.
Customers appreciate a company that offers them options and alternatives, especially when the company representatives make them feel like they would like their customers to have the best interests. This technique makes customers feel important and that they are provided special treatment.

Developing customer Relationship

Since customers are the ‘meat of the business,’ companies should put value in building good customer relationships. Once you are able to establish connections, you keep loyal customers who continue doing business with you and bring more people into the business.Good customer relationships drive the business to success. Just make people believe in your ability to satisfy their needs and fulfill their expectations as well as in your products and services. In the process of finding people who would believe in you, consider making a relationship with them and your company will not have to spend huge amounts of money just to attract more customers.
Relationships are developed over time and are not built overnight. It is not a one-time experience with your customers. That is why effective marketing plans include strategic activities that entail building good customer relationship apart from developing the product or adding a new product line to the market. In what ways can your business develop strong connections? Below are some helpful techniques for companies in building customer relationships.
Build Your Networks
Every business probably has a desire to grow and expand its operations. One way to achieve it is to build the network of customers. The company should not just focus on promotional activities and advertising programs but must take efforts to expand the network. A company’s network may consist of business associates, acquaintances, existing and potential customers, business partners or clients, suppliers, and contractors. Even family members and friends are part of that large network of the business.
The market is so huge a company is not able to reach out to everyone who can benefit from their product or service. There are a lot of prospective customers out there waiting whose needs your business can address. This is possible through the process of networking.
Expand your connections by conducting business seminars, attending company events and responding to business invitations, and getting exposed to the programs of the society. Since networking is a long-term investment, make sure to place value in a relationship once it is formed.
Keep in Touch with Customers Regularly
When we build good relationships with people, permanence is never a guarantee. Customers may come and go for some reasons, even with the most loyal of your customers. That is why once you have built a relationship with them, do not end from there. The process is continuous; a business has to constantly communicate with their customers. Communication should be done early and regularly.
After attending networking events and meeting new acquaintances, make it a point to initiate the next encounter and always make a follow-up. For existing customers, provide them with the latest updates of new products and any of your marketing programs. It is also a way of educating them with the latest market trends and keeping them up-to-date with industry technology.
Reward Loyal Customers
The first paragraph of this article mentions keeping loyal customers and in turn, they bring more people in the business which in fact, is a reality. A company should never disregard the value and potential of loyal customers. These people contribute a lot in your network expansion.
If you reward your loyal, repeat customers, they will pay you back by bringing in more customers to your business from their network of connections. If you think about it, the process becomes effortless marketing on your part. Your loyal customers become your best salespeople and marketing agents. Monetary rewards are old school but some companies still practice it. These may come in the form of credits, rebates, discounts, and other similar privileges. Recognizing their loyalty by acknowledging them during company events and occasions is also a way of rewarding them. A company that is able to sustain devoted and dedicated customers in the business has already developed a solid reputation in the industry it is in. Then again, the secret is to always constantly communicate with them and keep new ones coming.
Develop relationships with people who do not just use your product but are interested about what you can do for them. Keep the connection alive and always regard them with value, and they will be more than excited to tell others about their positive experiences and would want these people to also experience what they just did. It is but a domino effect.

Creating Effective Advertisement campaign

Marketing can be one of the most critical and tedious aspects of the business. A company spends money on marketing activities in order to gain public recognition as a way of increasing profitThe ground work of promoting and advertising your products and services is no easy task. A company should not just recklessly spend on advertising without studying their market and the industry.
In fact, a good research should be conducted in order to determine how to properly address customers’ needs. Advertising work is a lot of work. And a business must learn techniques to develop effective advertising campaigns.
Elements of a Successful Advertisement Campaign
The purpose of advertising is to promote the products and services to the buying public or the consumers and educate the potential market about the existence of your business commensurate to their specific needs.
Your advertisement should be addressed to the typical customers. The captions should be targeted to a typical buyer. The thought should answer more of their needs and not what you as the product or service provider wants for them.
Create a sense of urgency in your product advertisement for your consumers. Upon seeing your advertising campaign, there must be a feeling of urgent need to take advantage of the product or service right away. So, avoid telling them to buy tomorrow; they must buy it today. A powerful advertising is one that magnets their customers and prospects immediately after checking out the advertisement campaign.
Customers get more convinced if you present the list of product values and benefits on your advertisement. The essence of advertising lies on how well you highlight the advantages the customers can get from your service. No matter how attractive your ad is, if the competitive advantages are not known to the buying public, they will simply end up appreciating how artistically done the advertisement was.
A leading technique is helpful for a successful ad campaign. This means you will help the customers narrow down their options and minimize uncertain decisions of buying the product or not by emphasizing in your ads what the customers can do. They must be educated on what to do after reading your ad campaign. Do not leave them hanging as to where to get your product and how to contact you. Never assume that they will email, call, or visit your store once they see your advertisement.
Cost-Effective Advertising Campaign
There are various types of marketing or advertising campaigns a company can choose from. Usually small businesses refrain from taking the risk in advertising because it might not work and can be a waste of money. If marketing budget is to be considered, online advertisement is a good option. The period of time it reaches the buying public is pretty fast and output is generated quickly what with the many online users who spend more time on the internet these days.
Some print ad campaigns such as brochures, flyers, and pamphlets are effective, too, even if these are obsolete forms of advertising. Do not underestimate the power of these small marketing campaigns. They can still be as powerful as the huge forms of advertisements.
Tips to Effective Advertising Campaign
How can your business effectively reach a large audience or attract a wide range of customers through your advertising campaigns? An effective advertising can bring about success in the business if done correctly. The following are some tips a business can use in their product promotion.
If you are targeting a niche market, your ad must be created for that specific market alone. If you do not intend to promote your product or service to the general audience, refrain from creating generic ads that do not benefit a large market.
Advertise your campaign in proper, strategic places. You can learn where and how they can best be reached through market research. Monitor which ad campaign best attracts more customers. If radio does not seem as effective as television ad, then do not waste money on that particular campaign.Make sure that your business does not spend too much on advertising alone. Some wise businesses advertise according to seasonal advertising needs in order for the campaign to be effective. During off-peak seasons and down times, it is best not to push too much on advertising campaigns.

E-commerce Marketing

Most ecommerce retailers continue to rely on email spam and online pay per click advertising as the primary mechanisms to generate site traffic even though the cost continues to rise and the effectiveness is declining. A recent Forrester survey shows that in 2003, 31% of consumers deleted email advertising without reading it. In 2006 that number had reached 72%.
A more cost-effective and consumer-valued approach has been proven in other industries and retailers that adopt it first will achieve a competitive advantage. The approach is quite simple: Search + Blogs = Traffic
Search
Most people start with a search when looking for a product
Natural search findings achieve 75%+ of the resulting clicks
Blogs
The best way to be on the first or second search results page is to provide fresh content that is optimized to be found by the chosen search terms
Blogs provide an easy mechanism to publish content to your site and can be setup to create a SEO page for each blog post
Traffic
Cost-effective traffic enhancer (no CPC or email fees)
Greater customer engagement with your brand
Sizable increases possible in a matter of weeks

Offline Marketing Strategy

All the talk these days seems to focus around ways to promote your Internet business. Most of them center around online methods such as Ezine advertising and banner ads. But there are some excellent, offline methods you can use to promote your business, too.
And they're FREE!
Radio Talk Shows
There is practically an unlimited number of radio stations that bring experts in various fields into their studios. I'm sure you have heard some of these shows on your local radio stations.
The guest expert answers calls from listeners who phone into the radio station. You can be that expert!
During the show, you have ample opportunities to announce your Web address so listeners can visit your site.
You don't pay anything to be a guest. It's a win-win situation.
The radio station needs qualified guests to fill its airtime and you need the exposure. Everyone benefits.
Local Television Segments
Pay particular attention to the content offered on your local television stations. Do you notice shows, or segments of shows, where guests speak about various topics? If so, contact that station and offer to be a guest on their segment.
Chamber of Commerce Guest Speaker
Almost every city in the United States has a Chamber of Commerce. Although I don't have first-hand knowledge of such in other countries, I'll bet most have a similar organization.
Chambers of Commerce look for guest speakers. Most of them host weekly or monthly breakfasts or lunches to allow the business people who are members to network with one another.
During this time, they book guest speakers to offer a presentation to the Chamber members.
You have a captive audience that you can speak to, network with and direct to your
Local Business Magazines
Many towns have locally published business-oriented magazines. These deal with local interests as well as more broad topics relative to all businesses.
Contact your local magazine and offer to write a monthly or weekly guest column for them. Your credits will be provided with your article including your domain name.
Newspapers
The same idea used above for local magazines can be used to approach your local newspaper.
While papers do have staff writers, they are also looking for experts who can provide excellent insight into specific areas. You might consider contacting the Business Editor to get more information. Of course, include your Web address with your bio.
Association Newsletters
Most local chapters of associations offer printed newsletters that are mailed to their membership. Open your telephone book and look through the listings to find associations that fit with your target audience.
Approach these publications about contributing an article on a regular basis, provided your credits (with domain name) are included.
Create A Promotion
If your business has a product or service that can benefit the listeners or viewers of a TV or radio station, create an idea for a promotion and bring it to the Promotion Director's attention.
You might tie it in with a holiday or event. Perhaps during National Small Business Week, you can offer to give away products or services in a drawing.
The exposure you receive will far outweigh the cost of your freebie.
These are just a few ways you can promote your online business offline for free. If you look around your community, you're sure to find many others. Keep your eyes open and watch for other outlets that can bring promotional opportunities to your company and more visitors to your Web site.
Karon is Owner and President of KT & Associates who offers targeted copywriting, copy editing & ezine article services. Subscribe to KT & Associates' Ezine "Business Essentials" or visit her site at www.ktamarketing.com