Bite #15 Marketing Segmentation (part one)
Segmentation is the cornerstone of effective marketing and brand building. It’s the formation of groups of customers based on some criteria or characteristic . Formed correctly , segments can be a powerful organising principal for brand development.
There are three particularly good ways to segment the market – by profit, behaviour and benefit and I’ll discuss each of these over the next 3 videos.
Segmentation by profit recognises that different people have different financial value to a business. A person can be valuable because they buy regularly. A person may be valuable because he or she is relatively insensitive to price, and doesn’t demand or expect discounts. A person may be valuable because his or her loyalist will generate revenue over many years.
Segmentation improves efficiency by focusing your marketing spending on the group of people who are most likely to be receptive to your brand message. Every brand has some limited budget for marketing and brand building. Segmentation ensures that your limited resources aren’t diluted – but directed in a way that yields maximum effect.