Small Business Market Segmentation...Explained.

Know your target market because you can't be all things to all people!...  OK so I'm sure that you are aware of the term target market..... yep demographic, geographic and psychographic analysis  are all great ways to determine your target market..... But what happens when our target market is  too broad and generalised in nature....well... we break that target market down into segments....

Segmentation for your small business means dividing your target market into groups of consumers who have unique needs, characteristics and behaviours that will require unique products or marketing mixes.

Segmentation helps truly define a number of customer specifics....focuses your marketing efforts toward your customers needs, wants, fears and dreams to become  more relevant than the business down the road still happy creating marketing around basic demographic data.

 So how do I segment my target market?

Well lets start with four elements that need to be taken into consideration when forming market segments.

Measurable

without knowing how many potential consumers there are….it may not be worth the effort / risk.

If potential customers cannot be measured, you cannot create a measured marketing budget to target the segment...

Accessible 

A potential market segment must have its own marketing channels to effectively reach the target audience…how much marketing noise is in the particular market, if the niche isn't so "nichey" (I'm claiming that as a word)....maybe the segment isn't viable.

Different

Milk is milk….or is it??

A market segment will have a different response to the overall marketing mix (4, 5 or 7 P's which ever you prefer)  When a group of consumers inside that market express demands for product adaptation, it morphs into its own segment. 

Profitable

How sustainable is the segment and is it big enough to make a profit?

Selling lactose free milk would be a great market segment right now....but 25 years ago it was either full cream or skim and a lactose free range wouldn't sell.   

 Lets segment the milk market!

40 years ago milk was bloody milk, boy how times have changed...Cue the video!......

High protein, reduced lactose, no fat, low fat, skim milk, powdered milk, high calcium, extra dollop, A2, smarter white milk, omega 3, vitamin enriched……soy, almond, coconut.....goat and sheep.....

Segmenting takes customer analysis one step further.... it looks at purchase behaviour and the customers individual wants, needs, fears and dreams.... 

 I dream of a Utopian society free of inhuman treatment of animals.....buy ETHICAL MILK

I want my family to reduce chemical ingestion....buy ORGANIC MILK

I'm a 40yo woman that  needs to reduce the risk of osteoporosis... buy HIGH CALCIUM MILK

I'm a mother of 4 kids who needs cheap milk...buy GENERIC MILK

I'm a 25 year old women that fears I'm putting on weight...buy LOW FAT MILK

Most people consume milk.... and  segmenting the target market provides consumers greater choice and the manufacturer more profit. Certain milk costs more than others...but the demand is there for a number of specific varieties of product. Milk is not just milk!!! 

Segmentation allows you to look at your target market and really understand the who, what, when, where, why and how of your customers relationship to your products.... 

By better understanding your customer, you can not only provide more relevant products, but really narrow down your brand message to create more relevant marketing communications that are more genuine and less MASS market orientated. 

Real world...

When I first started introducing the Define marketing business to local owners I segmented potential clients into business types.... I met with hairdressers one week...mechanics the week after, each market segment has different and quite unique needs and marketing challenges.... 

I was able to focus my research efforts on the weekly business segment... better understanding potential clients needs allowed me to effectively communicate how I could help with specific challenges business segments would face......

think about your current target audience... how can you segment your particular list of clients in order to provide more specific and personalised service? Do you have any interesting segments that you have created along the way that you would like to share? Feel free to comment below.

Interested in marketing Segmentation for your small business? Go to www.definedesigndeliver.com.au to see how our service will help your business.