Bite #16 Marketing Segmentation (part two)
In my last video I outlined the importance of market segmentation and introduced the concept of segmenting based on financial value. Next up is Behaviour!
With Segmentation by behaviour, groups are formed based on some unique characteristic relevant to the business. For example a hardware shop might create groups ranging from ‘do-it-yourself renovator’ right through to the ‘weekend DIY Guy’. It’s important to note that these groups are based on the behaviours of these customers and not demographics such as age, income, sex etc. While these demographics have a role to play, starting the segmentation process with these fail to embrace more fundamental factors that are driving brand choice. The weekend DIY guy doesn’t buy the radiator cover because he’s a male between the ages of 25-45 and lives in a house hold of four. He buys it because he enjoys the feeling of achievement he gets from completing this simple house hold upgrade (not to mention the brownie points)
Segmentaion allows us to focus out marketing efforts, and spend in the areas most lightly to generate profit.