August 30, 2022, Comment off
How to Determine Your Target Market Segment
Market segmentation is an effective way of categorizing your potential customers into similar groups to target them better. But how do you know which market segment will suit your business? This article highlights everything you need to know about the market segmentation process.
This blog briefly discusses how B2B market segmentation works. How you can determine the ideal market segments to target for your business? By the end, you will be able to direct your marketing efforts more accurately toward the right audience.
How does market segmentation work
Market segmentation is the process of segregating similar customers into groups. The aim is to find the ideal audience and target them with appropriate marketing strategies.
Here are three things that companies use to group survey results into target market segment once they do a customer survey:
- Reaction: People who respond similarly to different things, such as marketing efforts, are grouped.
- Homogeneity: People that display the same or similar needs within the segment are grouped.
- Distinction: People who are unique from other people within the segment.
Take Puma, for example. The company is primarily known for selling sports footwear. Since it sells footwear to sprinters and football players, sprinters and football players are two market segments Puma targets. This is because, ideally, sprinters would respond to advertisements more than football players.
How did Puma come to know that different sportspersons have different requirements? Via research. And how did Puma manage to target them so precisely using unique ads? Through market segmentation.
Puma created different segments based on what each segment needs and how they react to a campaign, and targets them perfectly. This is a common market segmentation process that many B2C and B2B businesses use.
Now that you know how market segmentation works, here is how you can determine the ideal segment for your business.
How do you determine your target market segment
1. Look for the market segment that interests you
Before anything else, you need to identify the market that interests you. Answering the question “who do you wish to target and why” would help you find this segment. For instance, if you have a SaaS-based accounting tool for businesses, mid or large-sized businesses could be the market segment of your interest.
Pro Tip: Simply looking at what segment your competitor is targeting can save you a lot of time.
2. Dive deep and understand your market
Next, you need to understand your audience or consumers. Understanding requires research. So, conduct interviews and surveys, post ads, offer incentives, and understand consumers’ opinions. This will help you understand how your consumers think or react, which will further help you narrow down a large pool of customers into smaller target segments.
3. Segregate your segments
Once you know enough about your market, it is time to divide them into smaller groups. Doing this will make targeting your consumers easy and effective. You can divide your audience into sub-segments using demographic, behavior, geographic, and psychographic criteria. Market segments may vary from product to product or even from one campaign to another.
Pro Tip: Combining and using multiple segmentation types for segregation increase the effectiveness of the process.
4. Create your strategy and test it
Create a test or preliminary marketing strategy with all the data that you have gathered. Execute the strategy in all the different segments you created and analyze the results to determine the effectiveness. You can tweak the strategy for every segment if required. Ideally, your B2B marketing strategy will not be the same as that for B2C.
5. Select your target segment
Once you have the right strategy, choose the target segment. The target segment is the one that performed the best in the tests you conducted. Now you can create a full-fledged targeted marketing strategy that positions your product to the right audience in the way they desire. It will help you enhance conversions and revenue.
Engage with the ideal market segment
B2B businesses can find their target audience and personalize marketing campaigns using segmentation. It improves the effectiveness and ROI of the marketing campaigns and saves time and resources that would have been otherwise spent on a larger non-target audience.
So, follow the above steps to find your ideal marketing segment, personalize your marketing strategies and target your ideal customers better than ever. However, if you face problems or need assistance, you can contact a reliable agency that offers professional market segmentation services.