How To Properly Segment A Market
These are four key principals of how to effectively segment a market. These principles are derived from Alexander Chernev in the textbook “Strategic Marketing Management.”
What Are The Four Key Principles of Segmentation?
One of the many challenges facing businesses today, especially small businesses, is segmenting their market in a cost-effective, efficient way.
In order to efficiently segment a market, a business should seek to follow the four principles of segmentation which include: relevance, similarity, exclusivity, and comprehensiveness.
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Businesses should seek to group customers based on how likely they are to respond to their offering – all while meeting the business’ targeting strategy.
Segment people with homogeneous preferences.
It is important to note that each segment should be mutually exclusive from one another in respect to how they interact with the business’ offering. To clarify, consumers with similar preferences should be segmented in the same group rather than spread across many.
Customers should include all customers in a given market. Segmentation should make groups that are exhaustive – leaving no customer unassigned.
Sound segmentation is crucial when seeking to serve a viable target market. The process of value creation begins whenever a business examines its customers needs and resources, grouping them into segments and choosing which groups to serve and which to ignore.