Last modified:Thursday 31 October 2019
Naturally, you want to sell your product or your service to as many people as possible. However, one customer is not the same as another: not everyone has the same needs, and not everyone reacts in the same way to the same advertising and promotional efforts.
It is a good idea to clearly define your target groups or your target market. This is called market segmentation. Be aware: a segment is not the same as a sector. In fact, the market is divided into homogeneous customer groups (segments). A segment comprises potential buyers having comparable needs, requirements, desires, and expectations. You will then adopt a marketing strategy specific to each of these customer groups.
A market can be divided based on various criteria.
Target group: consumers (Business to Consumer)
Segmentation of target groups is still to this day generally based on traditional criteria:
- geographic (country, region, district, etc.);
- demographic (gender, age, household composition, etc.);
- socioeconomic (income, profession, training, etc.).
However, in modern marketing, other segmentation criteria are used to better represent the customer universe more reliably. We call these criteria psychographic and behavioural criteria:
- Lifestyle (hobbies, interests, and habits)
- Standards and values (philosophy, opinions)
- Drivers (motivation to use certain products or services)
- Customer value (who is a good customer, who costs money, who can increase the turnover)
- Customer loyalty (brand ambassador, advocate, etc.)
- Buying behaviour (who orders what quantity over what period and at the rate of what turnover)
- Wants and needs (information, ease of buying, ease of use, availability, customer service)
Target group: companies (Business to Business)
Although many B2C criteria can also be applied to the B2B market, the distinction is generally based on other criteria:
- Geographic (based on variables such as concentration of customers, regional growth factors, etc.)
- Customer type (company size, sector, turnover, etc.)
- Customer behaviour (loyalty, purchase motivation, customer value, etc.)
The market segments identified are then categorised into different customer profiles (buyer types). In fact, you place a "label" on different types of customers so that you know exactly which segment they belong to. It is only at this point that you can measure the effect of your different marketing actions on a defined segment.
The next step in the process involves defining the attractiveness of the different customer profiles (also called targeting).
You can then decide how to approach these different profiles. (marketing mix).
Don't forget about secondary target groups
There are also secondary target groups: you not only need to communicate with customers, but with other stakeholders and community groups as well.
The stakeholders are groups or individuals who have an influence on company targets. Internally, this refers to your own workers, unions, managers, etc. Externally, this refers to public powers, suppliers, shareholders, etc.