Tedlowidentifies four stages in the evolution of market segmentation: The economy was characterised by small regional suppliers who sold goods on a local or regional basis Unification or Mass Marketing s—s: As transportation systems improved, the economy became unified. Standardised, branded goods were distributed at a national level.
Example The Adventure Travel Company is an online travel agency that organizes worldwide adventure vacations. Segment B consists of middle-class families, who want safe, family-friendly vacation packages that make it easy and fun to travel with children.
Segment C comprises upscale retirees, who are looking for stylish and luxurious vacations in well-known locations such as Paris and Rome. Target Your Best Customers Next, you decide which segments to target by finding the most attractive ones.
There are several factors to consider here.
First, look at the profitability of each segment. Which customer groups contribute most to your bottom line? Next, analyze the size and potential growth of each customer group. Is it large enough to be worth addressing?
Is steady growth possible? And how does it compare with the other segments? Last, think carefully about how well your organization can service this market. For example, are there any legal, technological or social barriers that could have an impact?
It can take a lot of effort to target a segment effectively. Choose only one segment to focus on at any one time.
Then, you can select the marketing mix that will be most effective for each of them. First, consider why customers should purchase your product rather than those of your competitors. This will help you determine how best to position your offering.
Next, look at the wants and needs of each segment, or the problem that your product solves for these people. Example The Adventure Travel Company markets itself as the "best eco-vacation service for young married couples" Segment A.
It asks customers to send in interesting pictures of past eco-vacations, and the best one wins an all-inclusive trip. The campaign goes viral and thousands of people send in their photos, which helps build the Adventure Travel Company mailing list.
The company then creates a monthly e-newsletter full of eco-vacation destination profiles. Key Points The STP Model helps you position a product or service to target different groups of customers more efficiently.
This three-step approach helps you quickly zoom in on the most profitable parts of your business, so that you can fully exploit the opportunities these offer. To use the model, start by segmenting your market into groups. Next, choose which of these you want to target.
Last, identify how you want to position your product, based on the personality and behavior of your target market.Market segmentation is the activity of dividing a broad consumer or business market, normally consisting of existing and potential customers, into sub-groups of consumers (known as segments) based on some type of shared characteristics.
Tesla has been selling an all-electric luxury SUV, the Model X, since The vehicle has done relatively well in the market, helping Tesla to deliver a record , vehicles in total for Market Segmentation is a process of dividing the market of potential customers into different groups and segments on the basis of certain characteristics.
The member of these groups share similar characteristics and usually have one or more than one aspect common among them. A segmentation model is a physical tool that can be developed within a spreadsheet or database that provides calculations and rankings for identified critical elements that are necessary for you to meet your objectives within a particular segment.
Using Market Segmentation for Better Customer Service and More Effective Strategic Planning Market segmentation is best known for its use in marketing: customer acquisition, retention, and Tapestry is a profiling model that classifies households (and persons) into 65 segments by.
Market segmentation is one of the most efficient tools for marketers to cater to their target group. It makes it easier for them to personalize their Market Segmentation is a convenient method marketers use to cut costs and boost their conversions.