What’s Market Segmentation?
Market segmentation is the dividing of a company’s target market into groups and subgroups. By segmenting the market the company may then tailor sales campaigns and marketing plan in order to be specifically geared toward the identified groupings.
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Market Segmentation in Action
As most businesses can’t serve all of the current market, they need to identify where they can best sell their merchandise. A company, say a footwear retailer, will explore their market for sneakers. They’ll then segment the market into groupings such as:
- Geographical area
By segmenting the market the storeowner will then understand what inventory to carry in the shop. If the immediate area is inhabited by females under 30 who work in financial services, they’ll stock clever, office-type shoes to draw sales. The management will invent advertisements in local papers and radio, appealing to the market and might give the shop a facelift too.
In segmenting the market that the shop can also identify demographics previously not served by these or other shops. They may discover that there’s a sizable population, possibly outside the immediate area, of retired, middle income men. Now the store can stock appropriate lines, target advertisements in that area and do some leafleting through the mail. Identifying markets not already served is crucial to growth in any organization. By serving the industry and doing it well, a company can create a relationship and a fantastic name that’s priceless as a promotion tool for the long run.
Market segmentation may identify that inventory in store bears little connection to the goal area. The store will have to change lines or look past the region for sales. Early segmentation may assist the company avoid many pitfalls, while also help to develop strategy acceptable for the demographics of the market place.
Creating a Portrait of a Client
A store won’t be able to market to everybody on the market. But decent market segmentation helps paint an accurate portrait of possible customers. By keeping a mind’s eye picture of their client, the marketing department can develop strategy to entice them into the shop. The storeowner also can streamline staff appropriate to take care of customer type, in addition to stock goods in the store that can sell on the market. Market segmentation is the perfect way to break the industry down and know what is going to sell the very best in store.
What is a Niche Market?
A niche market is a subset of a bigger market with its own particular requirements or preferences, which might be different from the bigger market. By way of instance, within the marketplace for women’s shoes are numerous distinct niches, or sections. Shoes for vegetarian girls are a niche market, as would shoes for plus-sized girls, shoes for nurses, or even shoes for transvestites. These would be niche markets within the larger women’s shoe industry.
What Makes a Niche?
Just about any market can be further refined, or divided, by the specific needs and tastes of its components. Some of the most common ways to specify a market are based on:
- Price (high, moderate, reduction )
- Demographic base (sex, age, income level, education level)
- Amount of quality (high quality, high, moderate, low, economical )
- Psychographics (values, interests, attitudes)
- Geographic (the Purchaser’s precise location)
Marketing to a Niche
Marketing to a market is significantly simpler than appealing to a broad market, because a market has far more in common concerning needs, desires, or tastes. Selling handbags is a enormous market, as an instance, and there are several niches which have many distinct uses for a handbag inside it. You might have new mothers who want a handbag which may be utilised as a diaper bag, you may have college students who want a bag to carry their novels, single women needing a night bag to hold their phone, keys, and credit cards, touring mothers who need a large beach tote to maintain their family’s equipment, and a lot more.
But knowing the different needs of every market makes it possible to talk directly to them on your advertising — you will have a higher prospect of attracting a buyer’s attention and winning their company by making it clear your merchandise is for them especially.
The Downside of Marketing to a Niche
While targeting a market as your focus will make it infinitely easier to find them and convince them to buy from you, you will need to be sure there are enough buyers in that market to make it feasible. A pet shop that caters to a vast array of pet owners has a much bigger potential customer base than a pet shop that caters to local ferret owners, or Poodle fans. Those niches could be too little for a local population.
Having said that, veterinarians that specialize in treating horses or cats, as an instance, stand out from generic vets and position themselves as specialists in that niche. That is the advantage of targeting a niche market — people like to manage experts, which is what you become when you maintain a specific niche market as your focus.
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