Market Segmentation

Market segmentation is the division of a particular market into targeted or defined segments. Research is undertaken to identify what your target market is which will allow you to make a website that will appeal to the audience of people you want to visit your website. By understanding market segmentation, you understand the needs of your targeted audience. You can then tailor your website to meet the needs and expectations of the segment of the market that you have identified as being your target market.

Segmenting the market

Markets can be separated by a number of characteristics. The base for market segmentation amongst consumers includes:

• Demographic – (age, occupation, family size, life cycle)
• Geographic - (physical location)
• Psychographic – ( personality, values and lifestyle)
• Behavior - (attitudes, usage, responses and product knowledge)

Recognizing the diversity of customers is the first step in identifying the different needs of each market segment. A business can only determine its own niche after it has identified and analyzed the needs and wants of the different market segments. The following considerations are important factors that will assist in effective market segmentation;

• At a very basic level, the segment of the market you are targeting must be substantial enough for it to be worthwhile and generate profit. It has to be large enough to justify its targeting.
• It is important for the segment to be accessible. There must be channels of distribution and communication in order to reach the targeted market.
• The market segmentation must be durable. The market constantly changes, and in order to keep the effects of this down to a minimum, the targeted market must be relatively stable.
• The variable attributes of the segments must be measurable in their difference so they can be identified.

Why segment?

The benefits of market segmentation simply cannot be ignored. It is essential for any ecommerce website to succeed in its internet marketing strategy.

Keeps costs down

When trying to create an online store and implement an effective marketing strategy it is important to remember that your business cannot gratify all the needs and wants of all your customers. To attempt to do so will result a huge drain of resources. Small businesses in particular, will often lack the financial means to target substantial aggregate segments. By focusing the resources of the business on a targeted customer base, a small business may be able to forge a niche in a congested market that one of its larger competitors may not be able to fill. It will also help your business avoid an unprofitable market and keep the marketing costs down to a minimum, providing a good guideline for resource allocation.

Know your customer

Market segmentation will allow the business to understand the customer better, making it easier to identify the different needs and wants of your customers. Once these needs have been understood they can be capitalized upon and lets the business implement a marketing strategy that knows its market and keeps its focus. This focus will reduce costs and increase customer satisfaction, and will allow you to tailor a business website to respond to the varied and specific needs of the targeted customer.

Bowling pin strategy

This works on the theory that you knock one pin down and then the ones around it. By being a success in a particular market, it can give the business the leverage, experience and confidence to enter into a similar or related market.

Beat the competition

For many small business who are unable to benefit from the economies of scale that their larger competitors enjoy, effective competition has to achieved by being smarter and fulfilling the needs and wants of the customers the larger competitors are not catering for. A business can utilize their resources in a more focused and controlled fashion, and can have a much more effective marketing campaign that targets the more defined needs and ultimately, provides for them.

To summarize, when you make a website, market segmentation is of the utmost importance in effectively utilizing your resources to address the needs of a carefully researched and targeted group. You cannot be everything to everyone, but you can be something to someone.