What is market segmentation?
What Does market segmentation Mean
The action and effect of segmenting is known as targeting . It is about dividing something into segments, fragments or portions .
A market , on the other hand, is a social institution that encourages the exchange of goods and services . The market arises with the union of the sellers (offerers) and the buyers (applicants), who establish a commercial relationship to carry out transactions or agreements.
The notion of market segmentation , therefore, refers to the division of the market into smaller uniform groups whose members share certain characteristics and needs. These groups are not imposed arbitrarily, but arise after a market investigation that allows the different segments to be recognized.
Market segmentation reveals the existence of homogeneous groups in terms of their members (with people who are part of similar trends and who respond in similar ways to marketing strategies ), but heterogeneous among themselves (one group does not resemble another) .
In this way, when carrying out this aforementioned segmentation by any company, what it tries is to know what the needs of that group are to which its products or services are directed. In this way they will be able to adapt what it offers to the tastes of the same and also that will be an important stimulus for the entity that will take advantage of its competitors and that will see its profits increase.
Due to the results obtained, market segmentation is especially useful for freelancers and small or medium-sized companies, as it is the way that they can specialize in a specific sector where they will have the opportunity to become a true benchmark.
Selecting the market that best suits the articles and services it provides, building customer loyalty and even preparing the most appropriate and optimal marketing campaigns are the three main motivations that lead entities to undertake segmentation. This has to be undertaken based on the following steps:
• Identification of what the different variables of the segmentation are.
• Description of the profiles that occur within each segment.
• Evaluation of the interest and attractiveness of the segment based on the optimal benefits and results that can be granted to the company in question.
• Determination of the segment that can be really interesting and that it is with which it is going to work.
• Establishment of possible actions to undertake.
• Definitive and real application of the tasks to improve the state of the company based on the selected segment.
To develop segmentation, the segments must be identifiable, measurable, accessible and manageable. The logic indicates that each segment must be large enough to be profitable; otherwise, an entrepreneur would have no reason to direct marketing strategies to that group or invest in innovation for the development of new products for the segment.
The deep segmentation occurs when taken many variables that provide a broad understanding of each segment. This allows you to profile the buyer and anticipate with relative precision how consumers will react.