On my last post, I spoke of the 4 P's that composed the marketing mix. I left off where you knew what the components were but stopped before I said why you would want to manipulate them. The topic of this post will be to show why you would alter the variables in a marketing mix to reach your (potential) clients. Welcome to the art and science of segmentation.
Segmentation is the division of a market into smaller homogeneous groups or segments - similar but not quite the same as dividing a cake into slices (for a more complete definition of segmentation check out Wikipedia.)
Individuals within the same segment share similar characteristics but those in different groups will have differences in their characteristics. Because there are differences between one segment and another, a marketing approach that works well for one group may perform poorly for another group.
Characteristics that can be used to define a segment include:
- Physical - demographics (gender, age, region, income level etc...)
- Behavioral - lifestyle, innovation cycle, social class, etc...
- Product-related - product usage
In order to determine what is the best way to segment a market for a specific product the key attributes must be identified. It is beyond the scope of this post and my knowledge to delve into this discipline suffice it to say there may be a lot of analytical work and data mining activities. Eventually, you will be able to distinguish the different segments that compose the market for a product.Suppose you have figured out that there are 4 different segments that seem like good fits for your product. You will need to determine which segments will be worth investing in based on their perceived value. By examining the different groups, it may become apparent that each group may require a different marketing mix composition in order to be appealing to each segment. By tailoring the marketing mix you can design an offering that matches & appeals to the needs, goals & wants for each group of consumers. This is the answer to the question, "Why would you want to adjust the components of the marketing mix?"
The opposite of market segmentation is market aggregation. As you can guess, this means that everyone in the market will get the exact same marketing mix. There are instances where this is an effective marketing strategy. For example, with a product that is a commodity such as salt.