Research and analysis of your potential market are crucial to your success. Unless you understand what is happening in the market and the trends and desires of the consumers, you cannot fulfil the basic requirement of marketing. You must be able to satisfy and anticipate the demands of the consumer.Without customers you will not survive. Unless you can establish who your customers are, how much they will pay and where they will buy from, you cannot formulate a successful marketing strategy.There are six questions that you need to answer:Customers could come from a narrow or broad segment of the total population. They can be segmented into a wide variety of headings, such as:
Segmenting The Potential Market
There are a number of different ways in which you can segment your customers and the market. From the outset you should be clear, however, that there is no one perfect method of segmentation.
Geographic Segmentation
This is one of the simplest forms of segmentation. It consists of dividing your market on the basis of the geographical location of your customers. If all your sales are made in the domestic market, i.e. within the UK, you could segment your customers by region. On an international basis, you may consider that different countries have different consumer trends and can be segmented accordingly.
Demographic Segmentation
These forms of segmentation are probably the most popular, largely because they are associated with differences in consumer demand. This type of segmentation involves identifying consumers by socioeconomic factors such as age, sex, family size, income or lifestyle. It is also one of the easiest to undertake with the wealth of information available from both central and local government statistics.
There are two main methods used to provide the socio-economic groupings. The first classifies occupation and social class groups. The second, ACORN, classifies types of neighbourhoods.
Occupation And Social Class Segmentation
Care, however, should be taken when making general assumptions about a segment that is based upon one single social class. People with high incomes, perhaps in social class B, may have little disposable income as they may also have high fixed expenditure, such as a mortgage, which would leave little money left for ‘luxury’ products.