The Importance Of Market Segmentation Analysis
The practice of dividing target markets into consumer subsets is referred to as market segmentation. A challenge that arises with many businesses, particularly smaller businesses, is that these companies do not have the resources to pursue opportunities in each consumer subset.
The Need for Market Segmentation Analysis
The companies that are referred to in the above section have a need for marketing tools that can help them to determine which consumer subset is worth pursuing. One of the tools that is frequently used by marketing and sales professionals is called market segmentation analysis. The approach that it takes uses one of the more common concepts in marketing and sales management efforts known as STP, or Segmentation, Targeting and Positioning.
STP functions as the following: There are very few products and services on the market today that can effectively address and answer the needs of every single consumer. Therefore, companies need to analyze a particular market or market subset in order to determine which one is the most approachable and which group their marketing efforts should target. The use of positioning in market segmentation analysis enables companies to properly choose and target a specific market subset and to generate more revenue from the targeted groups while avoiding the waste of precious company resources.
The Benefits of Using Market Segmentation Analysis
In addition to helping you target the ideal market subset, the right market segmentation analysis application will provide you with the following benefits:
- Determining which segmentation criteria to use
- Performing a weighted analysis of each segment
- Providing segment sizing examples
- Reviewing the rankings that result with each segment
Your market segmentation analysis application will also chart the market segments or subsets that are the most approachable and offer the greatest opportunities for increased sales. Finally, market segmentation analysis will provide you with a broad range of information about your target audience and help you to devise more accurate sales projections.
