Market Segmentation is the division of potential consumers into groups with similar characteristics. Firms segment markets to help them achieve the marketing objectives. The two main benefits of segmenting markets are that it helps them launch new products and it assists them in marketing the products. Segmenting markets can help launch new products by helping them to identify the potential demand for new products. Segmenting markets can also help assisting them in marketing the products by knowing the characteristics and the behaviour of potential customers who can aid businesses in planning their marketing activities.
Markets are segmented by:
It is important that markets are segmented by age because demands for some products are linked with age. For example, toys are generally aimed at kids because toys are generally bought by kids or by parents buying it for them. The firms use promotional strategies such as advertisement to target the age group of children. An advantage of segmenting by age is that majority of the people target would buy the product if it appeals to them. Age is going a part of how ‘Jupiter Sports’ is going to segment its market. ‘Jupiter Sports’ is going to target a particular age group of 12 to 30.
Markets also segment by social class. This is usually done by considering the occupation of each head of household and ignoring the second or subsequent earners. Segmenting by social class is an advantage because you can target specific wage earners so, for example if you want to sell a product is it is more suitable you target a certain earning group who might buy the product. If I was going to segment ‘Jupiter Sports’ by social class then I would have targeted for example people with income of ï¿½10,000 to ï¿½20,000 per year.
Some businesses aim their products specifically at one gender so producing a range of products for women and separate range of products for men. Magazines industries, cosmetics and clothing mainly segment by gender. However, now some firms increase sales by targeting the opposite gender. If I was going to segment ‘Jupiter Sports’ by gender I would have targeted males because they are the majority of people who normally do physical activities.
Segmenting markets by lifestyle attempts to classify consumers according to their individual patterns of expenditure. For example, firms target specific groups by analysing what they buy through the internet, hoe much they purchase, whether they purchase using credit or debit cards, etc. So after targeting specific by lifestyle then they can make offers to people through direct mail, for example. Lifestyle is going a part of how ‘Jupiter Sports’ is going to segment its market. ‘Jupiter Sports’ is going to target people who generally do physical activities during their leisure time.
Geo- demographic segmentations groups consumers by using the combination of several geographic and economics factors such as where a customer lives, the size of their family, the type of house in which they live in, etc. They segment by geo-demographic because it is relevant for business planning the location, development of places such as pubs, leisure facilities, cinemas, etc. This is because only by geo-graphic segmentation they can decide whether they are going to build or develop public places, this will be done according to the needs and wants of the people in that area.
Niche and Mass market
When they are targeting the Niche market it allows the companies to identify and meet the companies’ needs of small segments of the market. It is beneficial for some businesses to target Niche markets because it enables them the small businesses to operate more profitability in markets that are dominated by the large firms.
Target markets are particular parts or segments of a market at which a business aims its product. It is important to know your target market because it allows us to meet the need of the customers. It also allows us when we are advertising; we can advertise it to only our target market as it will increase sales as the majority of the people are potential customers. ‘Jupiter Sports’ is going to target teenagers to buy our product because ‘Jupiter Sports’ helps the brain work better, so that the teenagers can be more active in the class or during any physical activity. Another reason for targeting teenagers is that majority of the teenagers normally buy drinks at shops so if I target their age group then I will be likely to increase my sales.
‘Jupiter Sports’ is going to be segmented by age group of 12 to 35 and the sort of lifestyle they have. This is because I believe that the age group of 12 to 35 are the more active people so this drink will be more beneficial to them. Another reason for segmenting by age is that they are the people who normally buy energy drinks. I have also segmented by lifestyle because I believe the people who do lots of sporting activities are the sorts of people who have huge interest in energy drinks so I segment through lifestyle will eventually increase sales.
I have created profile of a target group for ‘Jupiter Sports’ by analysing the results I gained from the questionnaire. I first did a questionnaire where I gave the public 10 questions to fill in and then I got all the answers I obtained from the questionnaire and analysed the results. From the results I was able to choose my target market as I chose the majority of people who would buy the product and what sort of lifestyle they have. I found out that for example, majority of people who would have bought might drink did lots of sports or they were students and mainly males. So then I decided to segment the market for ‘Jupiter Sports’ according to age and lifestyle.
Now that I have chosen how I am going to segment ‘Jupiter Sports’ market, I am going to go back to my aims and objectives and change them according to my segmentations so that they match.
So my new aims/ objectives are going to be:
Increase brand awareness among the target market – I am going to increase more male teenagers knowing about ‘Jupiter Sports’. This is because I segmented my target market by gender and age. I am also going increase the awareness of people who take part in sporting activities as I also segmented by lifestyle. I believe that increasing brand awareness among my target group is going o increase sales in the future. So my objective is going to be increase advertisement for male teenager by 60% by November 2006.
Increase customer satisfaction from our target market – I am going to increase the satisfaction of male teenagers knowing about ‘Jupiter Sports’. This is because I segmented my target market by gender and age. I am also going increase the satisfaction of people who take part in sporting activities as I also have segmented by lifestyle. I believe that increasing customer satisfaction among my target group is going to increase sales in the future and mainly improve the reputation of ‘Jupiter Sports’ among the society. So my new objectives are going to be decrease customer complaints by 90% by August 2006.
Develop new products to match our target markets’ needs – I have to develop new flavours of ‘Jupiter Sports’. From my primary research I have found out that majority of people wanted strawberry and apple flavour of ‘Jupiter Sports’ so I’m going to develop those new flavoured drinks and launch it as soon as possible to satisfy my male teenagers’ needs ( male teenagers are my target market). So objective is going to be to launch apple and strawberry flavoured ‘Jupiter Sorts’ by March 2006.
Increase sales from our target market – I have to try to increase sales of more male teenagers’ buying ‘Jupiter Sports’. I can do this by increasing customer awareness – I have to advertise specifically on male teenagers. So I can analyse how many male teenagers are buying ‘Jupiter Sports’ by doing surveys in shops finding out how many male teenagers my drink, etc. So my objective is going to be increase advertisement to male teenagers by 60% by November 2006.
As I have set new objectives for ‘Jupiter Sports’ so now I believe that these new objectives, which are specifically aimed at my target market, will help me increase sales and become a very successful and stable business in the market.