Consumers' attitudes toward products and services vary widely from organization to organization.
Their distinctive personalities are reflected in their needs, values, wants, ideas, beliefs, demographics, social affiliations, etc., which set them apart from each other.
Therefore, for an organization to adapt to its potential customers' needs, beliefs, demographics, etc., it must first market segment them.
Proper market segmentation starts with the identification of the target audience.
As soon as that has been done diligently, proper market segmentation can be used to divide customers into functional groups.
In this article, we will discuss what market segmentation is and what its importance is.
let's get started
What is Market Segmentation (The Definition)
Market segmentation consists of two unique terms: market and segmentation.
It is, therefore, necessary to capture the meaning of each term used, starting with the first term which is "market," for a clearer understanding.
The word "market" has a number of meanings.
The Oxford Advanced learners dictionary of current English defines a market as a place where people buy and sell goods.
It can also be defined as a group of people who as individuals or organizations have needs for goods and have the ability, willingness, and authority to purchase them.
As for "segmentation," it's the process of separating something into segments
According to the defined terms, "market segmentation" refers to the process by which organizations or marketers separate their target markets into different sections or groups in order to identify and profile distinctive buyers who share similar characteristics.
As a result, the target audience will receive quality products and efficient service that aligns with their needs and wants.
To illustrate our point, let's look at other definitions of market segmentation.
Armstrong and Kotler (2005) define market segmentation as "dividing a market into a distinct group of buyers with distinct needs, characteristics, or behavior and who might require separate products or marketing mixes.
Additionally, market segmentation involves dividing the market into groups of customers with very similar needs and wants so that each group can be served by distinct products or services.
5 importance of Market Segmentation to Online businesses
The importance of market segmentation to online businesses
In this section, we will examine why market segmentation is important for our online business
1. Identification of Audience
Communicating your brand message to a diverse market is essential because it allows the products or services to be seen by all and sundry.
But, it denies the organization from identifying individual customers' needs which certainly will ruin their marketing effort.
Therefore, market segmentation enables the organization to break down a diverse market into a smaller unit, which will enable them to identify and understand their target audience who share similar characteristics with ease,
2. Identification of the customer's need
Customers' needs need to be accurately identified for us to exceed their expectations.
Therefore, with the aid of market segmentation, organizations can easily and accurately understand their potential customers' needs and wants.
3. Deliver an effective product.
With market segmentation, organizations or marketers can identify and deliver the products or services that best suit the needs or wants of their target audience.
In truth, customer satisfaction occurs when products or services are delivered within the specifications of the customers, which increases sales, retains existing customers, and certainly gives the organization an edge over competitors.
4. Distribution channel
Market segmentation enables organizations or marketers to understand the most efficient and effective distribution channel to use for each segmented market.
5. Consumption behaviour
Market segmentation is an important tool that aids organizations or marketers to understand their potential customers' usage and buying pattern toward products or services.
Conclusion
Identifying market segments is of utmost importance.
Any new or existing online business owner should adapt the market segmentation strategy to their business.
When we do so, there's no doubt, we'll experience more customer satisfaction, more business deals and sales, and most importantly, a more positive perception of search and social media.
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