Market Segmentation Activities – Definition – Steps

To have a successful market segmentation process, you must go through several activities in a specific order. These activities are called market segmentation activities.

Market segmentation activities refer to the tasks and steps that companies must follow to enable them to properly segment the market and choose the appropriate market segment. This is the definition of market segment activities.

Given the importance of market segmentation activities and their impact on the success or failure of companies, So, this article will show you these activities in a simple and clear way. Let’s get started

List of market segmentation activities

Define your market:

Know where and who needs your products (your customers) in the market. Also, determine the size of your market, whether it is large or small. In addition, know the number of competitors and their marketing plans. All this information and more will help you get to know your market.

Try to collect any other important information about the market in your field.

Gather information about your customers:

After you identified the market and knew who needs your products or services, now collect information about your customers.

This information is what will help you to understand your customers’ characteristics to divide them into segments correctly. this information such as geographic information, demographic information, customer behavior, interests, etc.

For more information about what information is required for market segmentation, refer to the article Market Segmentation Data – The Best Guide

Segment your customers into groups:

Based on the data you have collected, divide your customers into groups according to geographic regions, age, gender, behavior, etc.

Taking into account, that each group of customers is divided depending on one or more common elements that brings them together.

Understand and analyze your market segments

After you have formed many customer groups, each group is linked by one or more common factors, you can now study and analyze them more clearly.

Such questions will help you a lot in understanding and analyzing the information that you have obtained: What is the volume of demand for your product from each segment? How much income will your company get from serving each segment? Can your company meet these needs with its current resources? ..etc.

In the same way, keep asking similar questions until you understand everything related to your market segments. After all these questions, your vision will become much clearer. Understanding your market well will bring you closer to choosing the right market segment for you.

Create your customer segments

After you understand and analyze the market segments you have created, you can now determine which market segment is suitable for your company.

The choice is often made according to the company’s resources and capabilities, as well as according to competitors in the market.

Furthermore, your company’s experience with the market and customers is one of the most important factors that determine your choice.

Also, you can choose more than one market segment to serve at the same time. The cross segments may reduce or increase the size of your target customers.

For example, if you select a specific geographic region and also select a specific age group within that geographic region. Then this overlap in market segments reduces the size of target customers in the market

On the other hand, if you first choose a specific age group from the market, for example, children. Further, you select another age group, which is infants, in this case, the size of your target customers has been increased

The previous steps represent the most important market segmentation activities. If you follow it properly, it will lead you to your goals.

Why you need market segmentation activities?

In simple terms, you need market segmentation activities to segment the market. But if you want to go deeper to answer this question, you can re-ask the question in another way, which is: Why do you need to divide the market?

In the following paragraphs, the most important reasons that lead companies to implement a market segmentation strategy.

Large market size

When the market size is large, your financial and management resources may not fully meet the market needs. moreover, if you serve this big market, the service level will be poor and the service quality will be lower
In this case. Market segmentation enables you to choose the most suitable part of the market for you to focus on. Therefore, you need market segmentation activities to help you get the job done

Different variation in customer needs

In some types of products, there is a clear imbalance in the needs of the customers. For example: If you provide a clothing service, of course, the requirements of infant clothing differ significantly from adult clothing.

Through market segmentation, you can choose the market segment that best suits you. Also, If your resources are able to serve more than one segment of the market, then, you can open different divisions or departments for each section separately. This increases your focus and raises the quality level of service.

These are the most important things that help you focus on the market and easily overcome your competitors. Therefore, you need market segmentation activities to help you reach these goals. For more information on market segmentation, see this article: Market Segmentation Definition – Great Info.

The previous explanation leads us to the importance of market segmentation. This importance directly represents the need for market segmentation activities. Because market segmentation activities will enable you to properly segment the market.

Importance of market segmentation activities.

Market segmentation activities derive their importance from the importance of the market segmentation process itself. This is because market segmentation activities are the right steps for market segmentation, which can lead you to obtain a suitable market segment.

In other words, these activities are the tools you need when you want to segment the market.

Therefore, in the following paragraphs, we will show you the importance of the market segmentation process, as it directly reflects the importance of market segmentation activities.

More focus from the company on customers

When the company determines what its target market segment is, it helps it focus a lot on it

Better service to the need of the customers

When the segmented market segment is limited and well defined, this makes it easier for the company to define customers’ needs more precisely.

It also helps the company to allocate all its resources to meet these needs. Which increases the efficiency and quality of your company service

Raise the company’s competitiveness in the market

The company’s competitiveness increases when the company focuses on a specific sector. This, in turn, will lead to an increase in the sales, profits, and income of the company as a whole.

Expansion in the market

For example, if your company chooses a specific geographical segment of the market to serve it, with time the experience and knowledge of your company increase in serving its sectors and how to market to it, this will facilitate expansion in any other geographic area easily.

Conclusion

Market segmentation activities refer to the tasks and steps that companies must follow to enable them to properly segment the market and choose the appropriate market segment.

List of market segmentation activities:

  1. Define your market
  2. Gather information about your customers
  3. Segment your customers into groups
  4. Understand and analyze your market segments
  5. Create your customer segments

Market segmentation activities derive their importance from the importance of the market segmentation process itself. This is because market segmentation activities are the correct steps for market segmentation.

Among the most important features that the market segmentation process provides for companies are:

  • More focus from the company on customers
  • Better service to the need of the customers
  • Raise the company’s competitiveness in the market
  • Expansion in the market

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