Market Segment Analysis
We segment market to find out who the product is primarily intended for and to understand the needs of those people. We divide all market consumers into specific groups — segments, depending on their needs. And use this information to determine your possible market share, more accurately make a sales forecast and build a sales strategy. It is not enough to have a good product if you go for success on the market. Even the best and most perfect product may not be needed by all potential consumers in this market. Some may not be satisfied by price, some by design or technical parameters.
Apple applies segmentation to its marketing strategies. The company promotes the smartphone as a luxury item, an ultra-modern device that changes a person’s lifestyle. Apple customers pay big bucks not only for quality, but also because they want to be part of a special group.
When you need Market Segment Analysis
To build a sales strategy. It is not enough to satisfy basic needs of your client. You need to solve his problem. Everyone has different problems. It is important to offer everyone the right product. Therefore, you better segment the market. We divide all consumers into certain groups – segments, depending on their needs. You offer each group a variety of products with suitable consumer properties.
Find your niche. We will help you choose the most promising among all market segments. If you choose a narrow target business segment, targeted traffic will be less, but of better quality.
Choose proper marketing tools. if you know the behavioral characteristics of the target segment and target audience, you can choose the right marketing tools, and not waste advertising budgets on non-targeted campaigns that do not suit you.
If you segment the target audience and work focused with each segment, you get serious competitive advantages and sales growth.
Steps of of market segmentation
Qualitative stage. Most consumers declare rational reasons for choosing a particular brand in each product category. For example, a low price. But is this always really the case? Indeed, there are obvious factors that influence consumer choice. For example, cost. But consumer motivation is influenced not only by rational, but also irrational, unconscious motives.
- a set of needs in a category;
- brand image (how well the product meets the emotional needs of the consumer; packaging design, perception by personal environment);
- purchase drivers and barriers;
- product attributes (product compliance with rational needs; how much the customer likes taste, cost).
The qualitative stage of market segmentation is implemented using online and offline in-depth interviews, focus group, or a combination of these research methods.
Quantitative stage. Allows you to segment the market and describe in detail the «portrait» of each segment with subsequent recommendations for brand promotion for each of the segments.
Based on the results of the quantitative research stage, you learn:
- consumer perception of categories;
- competitive advantages of brands;
- needs in the category (including those not met at the moment);
- brand map by statements, profiles of various brands;
- KBI of consumption and brand image.
A study with a sample of less than 1200 respondents does not allow us to describe in detail each segment and see significant differences between them.
respondents are the recommended minimum sample of the study