Whenever a new product/service (referred to as an organizations ‘offering’) has been created, it is necessary to analyze certain aspects of the market. Market segmentation is a process of identifying and grouping these target consumers. It involves sorting the potential buyers into groups who all have similar characteristics.
It is necessary to identify who is going to be buying the product (referred to as the target) and will there be enough of those people that want the product so that a profit can be made. Target marketing involves choosing the select group of people that you want to sell to so that you have an area of focus. This is referred to as differentiated marketing. It is also good to remember that this target can always be expanded as people can be convinced to purchase a product that they might have not previously considered. They do so when they discover that an offering exists and is priced ‘right’ to them.
Mass marketing, which is also referred to as undifferentiated marketing, involves selling the same product to all consumers. This means that you are working with a much wider target and must broaden your marketing efforts to appeal to a wider range of different kinds of consumers. This process helps to avoid direct competition and is great for companies who are looking to develop new offerings, expand or remarket older products.
As far as tactics are concerned, there are many different ways to conduct the research you need to target and segment your market. Technology has helped make market research much easier as companies can now collect data through polls, surveys and customer feedback. Even good old fashioned footwork is utilized, with market researchers simply inserting themselves into the places consumers go so that they can ask questions and collect information. Creating and exploring social media networks is also an extremely valuable tool to build relationships with consumers.
The ultimate goal for a company is to create repeat business. An organization should want to exchange offerings as many times as possible with every customer that they attract. Making sure that every customer has a valuable experience and are completely satisfied with their products and service is the best way to ensure that they remain a loyal customer. Finding and attracting new customers is much more difficult than retaining current ones but marketing efforts should still be created with current customers in mind.