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 correctly 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 clearly. Let’s get started.
Table of Contents
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, collect information about your customers.
This information will help you understand your customers’ characteristics to divide them into segments correctly—this information includes 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.
Each group of customers is divided depending on one or more common elements that bring them together.
Understand and analyze your market segments
After forming many customer groups, each group is linked by one or more common factors, and you can now study and analyze them more clearly.
Such questions will help you understand and analyze the information 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 more apparent. 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 and competitors in the market.
Furthermore, your company’s experience with the market and customers is one of the most critical factors determining 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, select a specific geographic region and select a particular 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, children. Further, you select another age group, infants; in this case, the size of your target customers has been increased.
The previous steps represent the essential market segmentation activities. If you follow it correctly, 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: 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, 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 can serve more than one segment of the market, 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 segment the market correctly.
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 proper steps, leading 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 its target market segment, 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, it is 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 company’s sales, profits, and income as a whole.
Expansion in the market
For example, suppose your company chooses a specific geographical segment of the market to serve it with time. In that case, the experience and knowledge of your company increase in serving its sectors and how to market to it; this will easily facilitate expansion in any other geographic area.
Market segmentation activities refer to the tasks and steps that companies must follow to correctly segment the market and choose the appropriate market segment.
List of market segmentation activities:
- Define your market
- Gather information about your customers
- Segment your customers into groups
- Understand and analyze your market segments
- 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 essential 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