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Market research is one of the primary tools that businesses use in order to know who to target and how to use this knowledge in marketing towards this set of people. And a more comprehensive way to do this kind of consumer survey is by breaking down different segments of your market or customer base. In business, this process is called market segmentation.
So if you are interested in the basics of market segmentation and how you can study and apply them to your own store or company, make sure to read until the end of this article. This article will focus on the use of market segmentation analysis reports, how anybody can create and interpret one, and how to apply this knowledge to your own business.
Provided below also are downloadable and printable examples of market segmentation analysis templates that any business owner, aspiring entrepreneur, or student may use as a base template for their own market research reports. As a reminder, we have included downloadable PDF templates below so first check if your computer has Adobe Acrobat Reader before downloading the template of your choice.
Market segmentation is the process of splitting up a group of people or a business market into different sections or segments that share a common characteristic, trait, or value. And when all the data created and compiled after a market segmentation takes place are meticulously examined, market segmentation analysis occurs.
Through the results of this analysis, entrepreneurs, business owners, and marketers can then formulate specific business strategies that will focus most of their resources towards a specific segment of the market.
There are different kinds of market segmentation—from geographic segmentation and demographic segmentation to lifestyle segmentation. Most businesses will employ a combination of these market segments and perform target market analysis in order to find the best subsegments in their targeted markets.
If you are interested in learning more about market segmentation and how you can correctly create analysis reports from them, check out the rest of this article and our website.
A characteristic of a good business is having a well-developed marketing plan. But before marketing managers can implement these marketing plans, they first need to know who they are selling their products or services to. And this is where a market segmentation analysis comes in.
In the next few paragraphs, we have outlined the steps that business owners should take in order to correctly identify the different sets of customers that will help bring the highest returns for the company. You can also read sample market analysis templates.
There should be sound reasoning behind every business decision. That is why when companies choose to apply market segmentation, they should already have done all the necessary market case studies to determine the potential of having a market segmentation strategy for the company.
Often, it is not recommended to implement a market segmentation strategy if the total costs for the segmentation strategy do not meet the projected sales of your products and services under a segmented market.
Another thing to consider before starting to implement a market segmentation strategy is the readiness of the organization—from the highest executive to the frontline salesman. To prevent any detrimental issues associated with the implementation of a market segmentation strategy, organizations should first address organizational culture, senior management support, employee training, and financial resources among others. You may also see market assessment templates.
Once an organization has weighed in the merits of market segmentation through a market segmentation study, it is now time to begin. The next logical step will be to define the ideal target market for their company or business. You can also see market analysis templates.
This is an important step since it allows marketers to know what to look for and assess for in their market pool. There are different ways to determine an ideal target market. One method is through the use of two main criteria. The first criteria is a basic, unchangeable element that should be found in your target segment. The second criteria are the appeal of a given segment and how easy are these segments to target. Of course, this second criteria will largely depend on the different preferences of the company and its executives. You may also see stakeholder analysis templates.
These are just the two main segmentation evaluation criteria. They will still be combined with other criteria such as segment size, growth, market potential, competition, socio-cultural factors etc before an organization can truly create an optimal definition of a company’s ideal target market.
The next step is to begin collecting market data. In marketing science, the kind of data needed to create a market segmentation analysis ranges from the market or population size, personal characteristics, age, lifestyle choices, place of living, educational attainment, and a lot more. You may also see business needs analysis templates.
More specifically, if a company want to conduct a market segmentation analysis, different segmentation variables and descriptor variables need to be considered. For example, if an airline company wants to subdivide their customer case and offer different ticket tiers based on the results of the segmentation study, the company marketers may use gender as a possible segmentation variable. You can also read hazard analysis templates.
At the same time, may also use a person’s travel patterns, demographics, and the reason/s for the vacation as descriptor variables of the study that will help them make a more effective analysis report later on. It is in this step of the process that. You can also read case analysis templates.
After gathering all the relevant market data and making sure that they are pre-processed for later statistical treatment and interpretation, it is now time to start actually extracting the different market segments in a given population. You can also read printable analysis templates.
Data extraction also means that marketers are now beginning to group people based on similarities and/or preferences. In the digital age, market data extraction is made easier thanks to the computed statistical analysis and different data visualization tools. Depending on your organization, you will most likely need to learn and use a different kind of visual tool.
Also, remember, that there is no perfect market data extraction algorithm. As a marketer or business owner, you need to continuously compare your different data sets and segments obtained using different kinds of segmentation tools. You may also like analysis examples.
Once all the relevant data sets are obtained, it is now time to create a bigger picture of your ideal target market based on the results of the segmentation analysis. The process of creating a complete profile of a market segment is also sometimes called profiling. You may also like sample market analysis.
Also, note that most companies may have multiple market segment profiles created. This step is done to make sure that they cover all their bases and know where to find their possible customer base. You may also see marketing flow chart templates.
Once a complete segment profile is created, it is now time to choose that first market segment to focus on. This final market segment that would most likely be chosen should satisfy the preferences of a company’s core management team and the likelihood that the company’s products and services will be bought by the target segment. You may also read job analysis templates.
The results of a market segmentation analysis report are useless if you do not combine this data with a strategic marketing plan. To do this, business owners and their respective marketing teams need to the following: 1) come up with a new product or a better packaging and brand image, 2) set up an affordable price point, 3) develop a realistic sales promotion plan, and 4) think up of a good distribution strategy.
By combining all these elements, you are creating a more viable environment for the success of your business using the new market segmentation strategy. You may also read free gap analysis.
As with different kinds of business strategies, marketers also need to check if a new market segment stratagem is effective or not. Business unit teams will have to continually monitor their sales and the various points of customers contact to get accurate monitoring and evaluation data.
Also, remember that markets and market segments change from time to time. Be ready to adapt to these market changes to ensure continued business relevance. You may also like printable project analysis.
And those are the steps on how to perform a market segmentation analysis. Use all the knowledge that you have gained in this article to create the best analysis reports for your organization or institution. Also, if you need help in formatting your own market segmentation analysis report, feel free to use any of the printable templates embedded within this article.
In this article, you have learned what market segmentation is, what a market analysis is, and how to perform a market segmentation analysis report. Put all these knowledge into good use by bookmarking this article. Alternatively, you can also check out the rest of our website for more examples of printable analysis report templates.
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