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Market Segmentation and Its Need, in Small Business
Market is a dynamic concept and its constituents are not homogeneous by nature. Each individual is a complex being and has a variegated set of needs and preferences and there are different environments that influence his/ her behavior and attitude from time to time.
It is essential that one benefits from this very ever changing nature of customers. For anyone operating in a market, selling his/ her products and services and catering to these versatile set of target audience would know that changing the products/services, customizing them according to customers and diversifying a business into different categories is an opportunity offered by dynamic customers and must be availed through market segmentation.
Market segmentation can be explored on the basis of demographic characteristics of clients like age and family size, through the geographic basis like states and locations of the clients, and via the psychographic and behavior based profiles of the target audience like the product knowledge, lifestyle and value system.
Large business can acquire all the essential details by conducting market studies which are expensive. For anyone running a small business should keep in mind that before exploring these varieties available for market segmentation, it is essential that one keeps few things in mind. Before market segmentation in a small business, one must always ensure that the target markets are available to one’s business.
Also, before establishing a customer base, ensure that the segment that one wishes to create has the customer size large enough to cater to and for each segment one should establish a different marketing strategy.
To know about the following things an individual running the small business must conduct a qualitative research, which is not that expensive and must depend upon the secondary sources of information like the research publications, trade publications, external services of measurement, etc.
Also, one needs to be observant of the competitors and their strategies. One can also ask for the feedback of the traders about the new segments one is planning to introduce.
Also, try to conduct a requirement or need analysis among the target audience. This can be achieved by conducting a factor analysis on the informal basis and by conducting cluster analysis in the prospective market.