fHP7vUGQROfUEd43JkNp Andrew Signature black

THE BLOG

Welcome to Innovate Africa With Dotun Adeoye

Infinite, sustainable growth ideas and examples for strategic thinking executives every Sunday

THE BLOG

Innovate Africa With Dotun Adeoye Every Sunday

Infinite, sustainable growth ideas and examples for strategic thinking executives every Sunday

Market Segmentation Dotun Adeoye

Gaining insight into your core customers through market segmentation

Market segmentation is valuable for understanding the people in your target audience and creating more targeted marketing campaigns. It can help you better understand who your customers are, what they want from your business, and how to reach them.

What is market segmentation?

Market segmentation is the process of dividing a target market into distinct segments based on specific criteria. It’s a way to understand better your customers and their needs and a more detailed picture of the people most likely to buy ducts.

This article will explain what market segmentation is, how it works, why it’s essential for business owners to use this technique when developing new products or services (and even existing ones), and how you might implement market segmentation in your business.

How do you determine a profitable customer segment?

To determine a profitable customer segment, you must first define your business model and understand how it works. Then, you’ll need to decide which fixed and variable costs. Fixed costs do not change with the number of customers or transactions made by each customer (e.g., rent). Variable costs vary depending on how many products or services are delivered (e.g., raw materials).

Next, calculate the profit margin by dividing the total revenue by total expenses:

  • Profit Margin = Total Revenue – Cost of Goods Sold – Variable Expenses – Fixed Expenses + Non-Operating Income

Why should you conduct market segmentation surveys?

A market segmentation survey is a great way to gain insight into your customers, competitors, products and industry.

You can use the results of a market segmentation survey to

  • Understand your customers better. Find out what they like about you, what they don’t like about you and why they choose to buy from you (or not). This will help guide future product development efforts so that the customer-centric features are built into future offerings likely to resonate with your core audience segments.
  • Understand competing products better by comparing them against each other in terms of quality, price point and other important aspects such as customer service levels or after-sales support options available through each brand/business entity offering similar services/products within this particular industry sector niche space where there is plenty of room left over for multiple players within each category space having similar pricing structures but still able to coexist peacefully because none of them offers 100% identical value propositions when compared side by side against one another.

Which customers should you target first?

The first step in market segmentation is to identify your core customers. They are most likely to buy from you and are interested in your product or service.

The best way to start is by looking at the customers you already know well: those who have already purchased from you, expressed interest in buying from you, and fit into one or more of the customer personas that represent your ideal customer (if applicable).

Market segmentation can help you create a more detailed picture of customers most likely to buy your product.

Market segmentation is a way to divide your market into smaller, more manageable groups. It allows you to get specific about the needs and motivations of each group. This helps you tailor your marketing efforts to match those differences. For example, imagine you’re selling a new type of sunscreen with SPF 50+ protection–but only if it’s applied daily (and reapplied). You could segment customers based on whether they use sunscreen regularly:

  • Those who apply sunscreen daily and reapply as needed
  • Those who don’t use sunscreen regularly but do reapply when necessary

Market segmentation is the process of dividing a target market into distinct segments based on specific criteria.

Market segmentation is the process of dividing a target market into distinct segments based on specific criteria. This can be done at different levels:

  • Demographic segmentation – demographic characteristics such as age, gender and ethnicity are used to divide the market into groups with similar characteristics. For example, suppose you’re selling insurance policies for older adults. In that case, you might want to focus on older demographics rather than younger ones who aren’t yet retired or don’t have dependents yet (who will be covered by their parents’ policies).
  • Psychographic segmentation – psychographic characteristics such as lifestyle choices (such as vegetarianism), personality traits (extrovert vs introvert) or values held by consumers are used when creating segments based on commonalities between them. For example, suppose you’re selling luxury watches. In that case, it might make sense for your to target not only wealthy individuals but also those who value quality craftsmanship over price point alone since these two factors tend to go hand in hand when talking tong about high-end products like watches where price does matter but so does quality materials used during the manufacturing process which gives rise another reason why higher priced options may cost more than lower priced ones despite having similar features between them.

Try these two approaches if you want to segment your market but don’t know where to start.

If you’re looking to segment your market but don’t know where to start, try these two approaches:

  • Focus on a specific need or problem that your product or service solves. For example, if you sell a  garden kit that allows customers to grow their plants indoors during the winter months (a common problem in northern climates), then focus on all the people who have this need and may be interested in buying your product. You can use market research techniques like surveys or interviews to learn more about these potential customers’ demographics (age, gender, location) as well as other factors such as income level, lifestyle preferences and hobbies/interests so that when it comes time for sales calls or emails later on down the road (which I’ll cover later), we’ll know exactly what types of language will resonate most with each kind of buyer.
  • Look for commonalities among your customers: Are there any similarities between them? If so, what might those similarities be?

Dividing your audience into segments allows you to get specific about the needs and motivations of each group, giving you more insight into how to reach them.

Dividing your audience into segments allows you to get specific about the needs and motivations of each group, giving you more insight into how to reach them.

For example, if you’re selling running shoes, segmenting by gender and age would allow you to target women who are interested in running marathons (and thus need specialised gear) versus young girls who want something cute that they can wear while walking around town. By targeting these two groups separately with different marketing messages and offers for each one–and then tracking the results–you can tailor your marketing efforts accordingly in the future.

When you think about your customer base, focusing on individuals cannot be easy. But the people in your target audience are diverse, with different needs and challenges.

When you think about your customer base, focusing on individuals cannot be easy. But the people in your target audience are diverse, with different needs and challenges. Segmenting your market will give you more insight into your core customers’ challenges and conditions so that you can deliver a better solution for them.

Market segmentation is a way to divide up the market based on its characteristics or behaviour patterns. It helps companies focus on specific groups within their broad target audience, trying to appeal to this group at once–and it’s beneficial when the number of customers within one broad group is specific (like “women aged 18-25”).

Successful companies know that they have different types of customers and tailor their marketing efforts to match those differences.

Successful companies know that they have different types of customers and tailor their marketing efforts to match those differences. Market segmentation divides a market into groups of customers with similar characteristics and needs, so you can understand what kind of product or service each group wants. It’s also essential for creating good products: if you need to know who your customer is, how will you know what they want?

When developing a new product or service, marketers use market research techniques like surveys and focus groups on determining which segments are most likely to purchase it. But this isn’t just something marketers do; anyone interested in selling anything can benefit from understanding how people think about themselves and perceive different products (or services).

Segmenting your market will give you more insight into your core customers’ challenges and needs.

By segmenting your market, you can gain insight into the needs and challenges of each segment. This can help you understand what your core customers need from you to solve their problems and achieve their goals.

Segmentation is vital to any successful marketing campaign because it helps businesses reach target audiences more effectively and craft messaging that resonates with them.

Bottom Line

Market segmentation is one of the essential tools in any company’s arsenal. It helps you understand your target audience and how they will likely respond to different marketing campaigns. By dividing customers into segments based on certain criteria, you can get specific about each group’s needs and motivations, giving yourself more insight into how best to reach them.

Who am I?

I am Dotun Adeoye, a Business Growth Strategist & Author of the 5 Pillars of Business Growth.

I’ve built up my experience via serial entrepreneurship, consulting leadership roles in business growth, business development and product innovation in large companies worldwide in the last 30 years.

Today, I consult with large businesses on how to sustainably grow their businesses, sustain infinite growth, and ensure business continuity irrespective of the business climate.

Hire Dotun Adeoye to Speak Virtually or In – Person at your company’s event to cover this or other topics. You can also get in touch via +44 203 097 1718 or dotun at dotunadeoye.com.


Facebook
Twitter
LinkedIn

Add Your Comment

Innovate Africa

With Dotun Adeoye

Every Sunday

DAWS 5

 Teaching business leaders how to grow their businesses & leave their legacy.