Do you know your customers intimately?

There are two main marketing strategies businesses can use to reach their customers effectively. There is mass marketing which refers to treatment of the entire market as a homogeneous group and offering the same marketing mix to all the customers. It allows economies of scale to be realized through mass production, mass distribution and mass communication. The disadvantage of this marketing approach is that customer needs and preferences differ and the uniform offering is unlikely to be viewed as optimal by all customers.

Given the above scenario, if a business needs to fully understand and know their customers, they must adopt the market segmentation approach. It is important to know who your customers are, why they purchase from you and what keeps them buying from you rather than your competitors. Please note that this doesn’t mean you have to know each customer personally, rather you need to know what types of people buy from your business. By types of people, I mean you need to know your customers’ demographic profiles.

Knowing your customers’ profile is known as “market segmentation “by marketers. This mean dividing your customers or entire market into segments or smaller groups that have similar demographic, psychographic and or product usage characteristics. A market segment is a sub-set of a market made up of people or organizations sharing with one or more characteristics that cause them to demand similar products and/or services based on qualities of those products such as price or function. This is very important as it will help you in understanding each segment of your customers better.

Please note that a proper market segment meets all of the following areas: it is distinct from other segments (different segments have different needs), it is homogeneous within the segment (exhibits common needs); it responds similarly to a market stimulus, and it can be reached by a market intervention. Businesses worldwide have adopted market segmentation as a corporate strategy, creating and maintaining detailed customer profiles for each product or service. This information serves as input in strategic decisions and tactical marketing activities, sales, product development, and customer support.

In order to get the best out of market segmentation, it is prudent to engage a professional marketing research company. There are many market segmentation products on the market. You have to select the one you think will best give you the information you are looking for. Please bear in mind that market segmentation is a purely a scientific market research process.

To your success!!!