Benefits of Market Segmentation

Hasty business decisions can sometimes work out for the best, but more often than not uninformed business decisions can have unintended consequences.  The correct approach is to have all the facts and information available in order to make a more calculated decision.  

Market Segmentation

The benefits of market segmentation are broad and we briefly highlight them below.

New Markets

With the use of market segmentation you may discover an untapped niche market that you can expand your business into.  For example a logistics company may find that there is a shortage of refrigerated trucks servicing a particular area.  It could then offer its refrigerated truck service to specific companies in the area.

Innovation

With effective market segmentation you can customise existing products and services to meet the specific requirements of a specific group of customers.  The segmentation process also allows you to identify completely new products and services for your target market. For example compressor suppliers have developed submersible machines that can be used in marine applications and in underground mines.  They have also developed mobile compressors that can be moved around to different building sites.  They have developed fire and explosion proof compressors for use underground in mines; consequently, by identifying particular market segments the manufacturers can redesign their products to better suit different segments of the market.

Less Risk

Market research helps you uncover more about the market and in identifying customer requirements. A product or service that is tailored to meet customer needs will have a better chance of being successful.

Focus your Business

A business can’t be everything to everyone.  A product or service cannot be a “one-size-fits-all” offer.  Market segmentation will help you identify who your target audience is and encourages your business to focus on the right customers.  Focusing on a defined market ensures you provide a specific product or service to those targeted customers. 

Marketing Strategies

Good market research segmentation will allow your business to fine-tune marketing strategies to the targeted segment. These marketing strategies will be effectively delivered to the relevant audience and the targeted customer can be reached more frequently and at a lower cost.

Market segmentation is a crucial element for any business and is vital for making the correct business decisions.

George Klein and Associates is a leading, experienced and specialised marketing research company in South Africa, focusing on the commercial and industrial market sector and offers a full house of market research services, including market segmentation

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