Segmentation

In: Business and Management

Submitted By jfang
Words 778
Pages 4
Segmentation
Advantages:
1. Improved Branding
By positioning yourself with a specific benefit, you create a unique selling proposition that sends a message to a target audience looking for that benefit. Characteristics that help create a brand can include price, status, affordability, speed or quality of customer service, or the professional certification or experience of the business owner or staff. Segmenting the marketplace with a second product or service line using a different name can help you protect your main brand. For example, if you own a high-end furniture store, don’t add resale items to your mix or you might turn off discriminating customers. Open a second location under a different name, and sell used items there to protect your main store.
2. Increased Sales
If you cater to a specific audience, you might lose sales among potential customers outside your target audience but increase your overall sales by attracting more customers in your target demographic. For example, if you position your hardware store as the place for serious DIY home and garden enthusiasts, you might decrease visits from the majority of homeowners in your town who are casual customers but see hard-core home and garden products buyers flock to your store. These buyers might also increase their repeat shopping with you, leaving your competitors, which will further boost your sales.
3. Better Distribution
If you have a specific market segment you’re trying to reach, you can decrease your distribution channels, targeting those outlets that have the highest amount of traffic from your desired customers. Once you learn where your main target customer shops, you can focus your sales and promotions budgets in those outlets.
4. Better Advertising
By limiting your audience, you can choose magazines, websites, radio and TV stations and events that your customers are more likely to…...

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Existing strong and aggressive competitors; easy for new entrants; existence of actual or potential substitute products; relative power of buyers; power suppliers that control or prices or reduce the quality or quantity of ordered good and services Company objectives and resources 
A company should only enter the segments in which it can create superior customer value and gain advantages over its competitors Selecting target market segments Micromarketing The practice of tailoring products and marketing programs to the needs and wants of specific individual s and local customer groups Local marketing 
Tailoring brands and promotions to the needs and wants of local customer groups Individual marketing 
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