Market segmentation Essay -- essays research papers

Market Segmentation This document prepared and presented by Business Resource Software, Inc. Market Segmentation The purpose for segmenting a market is to allow your marketing/sales program to focus on the subset of prospects that are "most likely" to purchase your offering. If done properly this will help to insure the highest return for your marketing/sales expenditures. Depending on whether you are selling your offering to individual consumers or a business, there are definite differences in what you will consider when defining market segments. Category of Need The first thing you can establish is a category of need that your offering satisfies. The following classifications may help. For businesses: Strategic - your offering is in some way important to the enterprise mission, objectives and operational oversight. For example, a service that helped evaluate capital investment opportunities would fall into this domain of influence. The purchase decision for this category of offering will be made by the prospect's top level executive management. Operations - your offering affects the general operating policies and procedures. Examples might be, an employee insurance plan or a corporate wide communications system. This purchase decision will be made by the prospect's top level operations management. Functional - your offering deals with a specific function within the enterprise such as data processing, accounting, human resources, plant maintenance, engineering design, manufacturing, inventory control, etc. This is the most likely domain for a product or service, but you must recognize that the other domains may also get involved if the purchase of the product or service becomes a high profile decision. This purchase decision will be made by the prospect's functional management. For the individual consumer: Social Esteem or Pleasure - your offering satisfies a purely emotional need in the consumer. Examples are a mink coat or a diamond ring. There are some products that are on the boundary between this category and the Functional category such as a Rolex watch (a Timex would satisfy the functional requirement and probably keep time just as well). Functional - your offering meets a functional requirement of the consumer such as a broom, breakfast cereal or lawnmower. Segmentation of Needs Then you should establis... ...ularly concerned with keeping employees informed and educated, so educational offerings are not of great interest. Strongly influenced by offerings that most closely deliver the 'end results' desired, even if they are not the most cost effective. Self Helpers - consistently defines/designs solutions to their problems, likes to acquire tools that help in the innovation process. Will usually consider new products/services, but the related concept must have been proven to be effective. Often consider just because they use a certain technology that is relevant to the development program they have underway. Will always want to review competitive offerings, but will usually choose the one offering the most effective 'do it yourself' features. Usually consider themselves technically competent and will expect very effective use of proven technology. Not especially inclined toward technically complex offerings, would rather have user friendly, but thought provoking, offerings. Conversion costs usually not a major concern if offering promises potential for innovation. Usually concerned with keeping employees informed and educated, so educational offerings are of interest.