Market segmentation is crucial for modern business. Nowadays, one may observe the immense growth of the economy that is extremely unpredictable. Mass marketing is no longer relevant as far as there is no need to spend resources on the audience that is unlikely to be interested in a particular product and service. Market segmentation is the way of identifying individuals who will be interested in goods or services.
The paper under consideration entitled ‘W5 on Segmentation” was posted on July, 14 by the company W5. The article provides readers with the general notions concerning market segmentations that are essential for the understanding of the nature of this approach to marketing. Segmentation research is a way of identifying the target audience with the help of the detailed and profound analysis. Standard marketing presupposes the analysis of the audience according to their demographics (age, income, gender, and region).
When conducting segmentation research, demographics are only one part of the research. Other constituents include the evaluation of behavior, attitude, and psychographic factors. According to the article provided, market segmentation should possess four necessary criteria. First, a particular segment should exist in reality. Second, there should be defined variables typical for one segment. Third, it is necessary to reach the segment within the prescribed amount of time, and that presupposes that it has to be a continuing situation. The stability of the action is the final constituent (“W5 on Segmentation” par. 4-5).
In the following part of the paper, the procedures of the segmentation research are described. The process starts with the development of the questionnaire. The questionnaire should not be based only on demographical factors. It should aim at identifying unique customers’ needs that will influence the choice of marketing strategy. The survey should include data about consumers’ personalities, habits, beliefs, awareness of brands, and media channels. The next step is the sample size. The sample size should be large as far as otherwise, it would be impossible to identify particular segments with definite interests. Besides, large samples are necessary for deep research. Finally, pre-segmentation data analysis follows. This step includes the gathering and evaluation of all already existing data that will be useful for future research.
After the study of the consumer’s behaviors, attitudes, and other factors, it is necessary to derive segments. The division into sections should be based on such factors as the size of sector and attitudes, behaviors, and psychographics. According to the article, four steps should be conducted for the efficient evaluation of segments. The first phase is factor analysis. It is used for the finding of the so-called “underlying factors”. These underlying factors can be understood as potential consequences or branches from one larger factor.
Cluster modeling is the next step that presupposes the division of consumers into groups based on some common features. Thus, these shared features should be identified and arranged accordingly. When groups are defined, it is advisable to test its validity. The discriminant analysis is the next step that is used for testing. The last stage is the formation of the predictive algorithm. It comprises of the final list of attitudes, behaviors, and psychographics that will be used for the creation of the marketing campaign. In the last part of the paper, it is noted that the results of the process of segmentation should be used for analytical purposes.
Work Cited
W5 on Segmentation 2014. Web.