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What is Market Segmentation and Targeting?

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Posted by Your Guide on October 31, 2005 3:27 PM

Market segmentation is a type of marketing method that includes the identification and analysis of separate groups of customers and prospects (also known as potential customers). These groups respond differently to marketing activity and often share common needs. By dividing a market into segments, marketers are better able to focus their promotional efforts on the highly specific needs of each audience. In essence, the goal of market segmentation and specific target marketing is higher response rates or sales rates from the intended audience.

A main function of marketing is seeking out those customers who do not feel as if their needs have been met. Since not all consumers share the same needs and wants, it is important to begin the process of segmenting by using these criteria. Once customers have been segmented into categories, marketers are in an ideal place to begin positioning their brand in customers� minds while at the same time hitting them with focused, direct promotions. These direct promotions, or direct marketing initiatives, are specifically designed to persuade the consumer to make a purchase.

The importance to marketers in this situation is that they pinpoint a particular target audience where their products or services will act as the solution to the customer needs. While effectively finding such a market and successfully selling the solution will require much work, the benefits will be well worth the effort. Pinpoint segmentation into target markets followed by aggressive, persuasive direct marketing/selling can see much higher return on investment than any other form of marketing.

Next Page: What are the first steps in Market Segmentation and Targeting?

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