Marketers have the ability to get high-fidelity information on their target markets through market segmentation. Market segmentation is the process of categorizing potential customers based on certain variables, such as age, gender, and income. A market segment is a group of customers that will react in the same way to a particular marketing campaign. By gathering this information, marketers can tailor their campaigns to groups of prospects to build stronger relationships with them.
Marketers gather this demographic information through surveys, usually when the customer submits a product rebate or willingly participates in a customer satisfaction survey. Over the majority of the past few decades, market segmentation consisted of differentiating prospects based on very simple variables: income, race, location, etc. While this is definitely important information to have on your target market, modern market segmentation takes into account more integrated information.
Modern segmentation breaks the market into target clusters that take into account not only standard demographics, but also other factors such as population density, psychographics, and buying and spending habits of customers. By focusing on these variables in addition to standard demographics, you can gain deeper insight into customer behavior.
Using standard demographics, you can tailor your marketing pieces to specific groups of people. But, by including these more sophisticated variables in your segmentation process, you can determine achieve a higher degree of "lift" or return on your segmentation efforts.
Segmenting your market on these factors helps you realize your total opportunity and revenue potential. It can enable you to better compete with similar product or service providers and lets you know where you stand within the game. It can help you target untapped market opportunities and allow you to better reach and retain customers.
Market segmentation depends on the gathering of high-quality, usable data. Many companies exist to gather and sell massive databases of targeted customer information, as well as providing consultation services to help you make sense of data bought or already owned. The key to the process is determining the best way to split up data.
There are essentially two methods for categorizing customers. Segments can either be determined in advance and then customers are assigned to each segment, or the actual customer data can be analyzed to identify naturally occurring behavioral clusters. Each cluster forms a particular market segment.
The benefit of cluster-based segmentation is that as a market's behavior changes, you can adapt your campaigns to better suit the cluster. The latest techniques blend cluster-based segmentation with deeper customer information acquired via data mining. Data mining uses algorithms to interrogate data within a database, and can produce information such as buying frequency and product types.
This new method of market segmentation, combining segmentation with data mining, provides marketers with high quality information on how their customers shop for and purchase their products or services. By combining standard market segmentation with data mining techniques you can better predict and model the behavior of your segments.
Source: http://ezinearticles.com/?New-Method-of-Market-Segmentation---Combining-Segmentation-With-Data-Mining&id=6890243
Marketers gather this demographic information through surveys, usually when the customer submits a product rebate or willingly participates in a customer satisfaction survey. Over the majority of the past few decades, market segmentation consisted of differentiating prospects based on very simple variables: income, race, location, etc. While this is definitely important information to have on your target market, modern market segmentation takes into account more integrated information.
Modern segmentation breaks the market into target clusters that take into account not only standard demographics, but also other factors such as population density, psychographics, and buying and spending habits of customers. By focusing on these variables in addition to standard demographics, you can gain deeper insight into customer behavior.
Using standard demographics, you can tailor your marketing pieces to specific groups of people. But, by including these more sophisticated variables in your segmentation process, you can determine achieve a higher degree of "lift" or return on your segmentation efforts.
Segmenting your market on these factors helps you realize your total opportunity and revenue potential. It can enable you to better compete with similar product or service providers and lets you know where you stand within the game. It can help you target untapped market opportunities and allow you to better reach and retain customers.
Market segmentation depends on the gathering of high-quality, usable data. Many companies exist to gather and sell massive databases of targeted customer information, as well as providing consultation services to help you make sense of data bought or already owned. The key to the process is determining the best way to split up data.
There are essentially two methods for categorizing customers. Segments can either be determined in advance and then customers are assigned to each segment, or the actual customer data can be analyzed to identify naturally occurring behavioral clusters. Each cluster forms a particular market segment.
The benefit of cluster-based segmentation is that as a market's behavior changes, you can adapt your campaigns to better suit the cluster. The latest techniques blend cluster-based segmentation with deeper customer information acquired via data mining. Data mining uses algorithms to interrogate data within a database, and can produce information such as buying frequency and product types.
This new method of market segmentation, combining segmentation with data mining, provides marketers with high quality information on how their customers shop for and purchase their products or services. By combining standard market segmentation with data mining techniques you can better predict and model the behavior of your segments.
Source: http://ezinearticles.com/?New-Method-of-Market-Segmentation---Combining-Segmentation-With-Data-Mining&id=6890243
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