Segmenting your market is important and here is why
Know the bases for segmentation and the 4 fundamental requirements.
Market Segmentation stems from understanding that a single business or individual, cannot be everything to everyone. Therefore, businesses use Market Segmentation to divide consumers into groups that have similar traits. Psychographic and demographic segmentation is used to break up and reassemble consumers into specific groups. Psychographic segmentation is used to divide the market into groups based off of values, beliefs, interests, and attitudes. While demographic segmentation divides the market into groups based on geographic location, age, income, education, gender, and occupation.
The purpose of these forms of segmentation is to help gain a better understanding of the different buyer personas your product/service will apply to. This will benefit the business, by allowing them to tailor promotion, product, placement, and pricing strategies to better fit the various segments of the market; or to better fit a specific market segment that is believed to be more cost-effective. After thorough analysis of the various market segments you will now be able to draft and finalize your buyer personas, which should provide the answers to the 5 W’s and the big H. You should know who your buyer is, why they want to buy, where they want to buy it, when they want to buy it, what they want to buy, and how they want to buy it.
Four requirements for Market Segmentation can be found in MADS! Marketing segments should be measurable, accessible, differentiable, and substantial.
Measurable in that each segment should be quantifiable.
Accessible in that each segment can be reached through a cost-effective marketing program.
Differentiable in that each segment can be differentiated from another.
Substantial in that the segment has great potential to return costs incurred to reach the segment and provide a profit
Next time you're working on introducing a new product or launching a new business make sure research your target as thoroughly as possible.