Most businesses don’t succeed on luck alone. Most invest a lot of time and resources into uncovering what consumers want and how much they are willing to pay for it through comprehensive market research studies. They also segment their market; they divide their consumers in to groups based on similar, shared characteristics. This enables companies to better identify and address consumer needs, advertise their product(s) and spot opportunities for growth. It helps them succeed on more than luck. Here are three good reasons you should spend more time thinking about market segmentation:Market Segmentation Enhances Brand Image
Trying to please everyone is a futile endeavor. Smart businesses know that they can’t be everything to everyone. Instead, they focus on pleasing a few, carefully chosen consumer types with specific products and services. By narrowing their focus, each company can strive to provide the absolute best instead of just providing a lot.
For example, Rolex wouldn’t dream of selling to consumers through Wal-Mart. They have chosen to segment and target consumers based on status and price. By keeping Rolex distribution proprietary, they ensure that their brand image remains “sophisticated,” “exclusive” and “luxuriant” so they continue to attract consumers who value those qualities. Trying to please everyone (by making Rolexes more accessible, in this case) would only alienate the consumer who trusts that his new watch is truly special, meant only for people like him.
Market Segmentation Helps Allocate Resources
Think about those companies that are really doing well: Nike, McDonald’s, Whole Foods. Each knows how to accurately use market segmentation to direct resources in profitable ways. Nike doesn’t waste time considering how to please Wall Street workers wanting Italian leather loafers. McDonald’s doesn’t advertise in Vogue. Whole Foods doesn’t enter rural communities. They know their ideal market segments.
Indeed, they have them further categorized to specific buyer personas – athletes; kids and people in a hurry; educated and affluent city-dwellers. Instead of having to keep abreast of a million wants and needs of a million types of consumers, companies can use market segmentation to keep abreast only of the ones that truly matter and cater to them.
Market Segmentation Strengthens Communications
They way we speak is influenced by our audience. It’s a fact. A college professor doesn’t visit her fifth-grade son’s science class and use the same terms she would with her own advanced-level anatomy students. Parents don’t talk the same way to babies as they do to older children. Companies that match their communications, including their promotions, sales literature and advertisements, to specific audiences inevitably resonate more with their consumers than if they simply strive to appeal to the masses.
By adapting style, tone and vocabulary to suit individual segments, companies are able to truly address specific consumer wants and needs. They can target their messages through publications, in various locales, at events and on the radio, television or Internet, depending on how and where and when their specific consumers might congregate.
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Accurate, fully formed market segmentation can be the key to your business’s success, making it easier for you to address current consumer needs and forecast new ones. It makes sense; if you want to be good at something, you have to focus your efforts. Whittling down a market means you can focus spending your time and money where it actually counts. For more information on market segmentation and the market research process, contact our team at Communications for Research (CFR).
If you're looking to spend more time on market segmentation, you'll want to discover which markets to go after which may require market research! In order to justify a deeper dive into market segmentation to your clients or bosses, you may enjoy our free eBook on communicating the value of market research. Download it for free today:
