Using Market Segmentation in Research
Because different groups of people with different characteristics have differing attitudes and opinions about consumer products, market researchers have sought for meaningful ways to identify those segments of the population most likely to be influenced by a particular marketing strategy. Market Segmentation, therefore, refers to the process of dividing a population into groups or segments with similar characteristics in order to conduct more meaningful research by targeting specific groups of consumers. These segments can be created using demographic variables, geographic variables, psychographic variables, or behavioristic variables. By focusing on a particular segment of the population through these variables, market researchers can identify how certain consumers will react to new products or changes in old ones.
Here's an example found in a consumer behavior article by Nancy D. Rhodes from Texas A&M University: "In 1987, Colgate-Palmolive introduced a new product that was a combination laundry detergent and fabric softener. Because it was in a hurry to beat the competition to the stores, C-P neglected to conduct careful market research. The product was targeted to large families. Yet, the product was perceived by members of large families as too costly; large families tend to have tight budgets. Thus, the product failed largely because the company marketed it to the wrong segment. The product would likely have been more successful if marketing efforts had been targeted toward single people, apartment dwellers, and college students. These groups are typically more willing to pay extra for convenience. Thus, an error in market segmentation can be quite costly."
In order to conduct this type of market research, online survey software programs, like Qualtrics, can provide all the essential tools you'd need. As questions of different variables are generated and sent to consumers, a Qualtrics library panel can categorize those responses and segment them into specific groups for future research. This allows market researchers to save time and money by marketing to the right segment of the population.
May 15th, 2008 at 02:37 CDT
Many large businesses use market segmentation software, but often small businesses can't afford software or marketing agencies to do their market segmentation.
But there are simple ways that small business owners can do it themselves. It's results aren't as sophisticated as those from software and agencies, but it at least gives them ideas about how to market to a their best potential customers.