Jun 3, 2013

Reasons to Segment your Markets

There are several important reasons why companies try to segment their markets carefully. These are summarized below

  1. A better match between the needs of customers: Customers' needs are different. Creating separate offers for each segment of the senses and offers customers a better solution
  2. Improved profits for the company: customers have another disposable income. They differ in how they are price sensitive. By segmenting markets, businesses can increase average prices and improve profits
  3. Better growth opportunities: market segmentation to increase sales. For example, customers can "trade up" after he is promoted to a particular product with a product launch, introduced cheap
  4. Retain more customers changing client circumstances, for example, they age, form families, to change jobs or get a promotion, change their buying habits. Marketing of products that appeal to customers at different stages of their lives ("life cycle"), can bind a business customer that otherwise competing products and brands could change
  5. Target marketing communications, companies must deliver their marketing message to a public customer in question. If the target market is too broad, there is a strong danger that go (1) lost major customers and (2) the cost of communicating with customers too high / unprofitable. For the target customer segmentation can be achieved more often and at a lower cost
  6. Gain stock market segment: If a company has a strong hand or a leader, it is unlikely that maximize profitability. Minor notes suffer from a lack of economies of scale in production and marketing, print distributors and limited space on the shelves.
Through careful targeting and segmentation, companies can often achieve competitive production and marketing costs and the first choice of customers and dealers. In other words, segmentation provides the opportunity for small businesses to compete with larger ones.

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