How does market segmentation influence marketing strategy planning?

Market segmentation influences marketing strategy planning by helping businesses target specific groups of customers effectively and efficiently.

Market segmentation is the process of dividing a broad consumer or business market into sub-groups of consumers or segments, based on some type of shared characteristics. These characteristics could be demographic, psychographic, behavioural or geographical. By understanding these segments, businesses can tailor their marketing strategies to meet the specific needs and wants of these groups, thereby increasing the chances of success.

For instance, a company selling luxury watches would not target teenagers or young adults, but rather affluent adults who appreciate and can afford high-end products. This is demographic segmentation, based on age and income. The company would then plan its marketing strategy around this segment, perhaps focusing on high-end magazines, luxury events, and other channels where their target customers are likely to be found.

Similarly, a business might use psychographic segmentation, which divides the market based on lifestyle, personality, or social class. A company selling eco-friendly products might target consumers who are environmentally conscious and lead a sustainable lifestyle. Their marketing strategy might involve promoting their products on social media platforms popular with this group, or partnering with environmental charities to boost their green credentials.

Behavioural segmentation is another key aspect, which involves dividing the market based on consumer behaviour, usage and decision-making patterns. For example, a software company might target businesses that have recently upgraded their IT systems, assuming that they might be in the market for new software. Their marketing strategy would then focus on highlighting how their software can integrate with and enhance these new systems.

Lastly, geographical segmentation involves dividing the market based on location. A local bakery might target customers in its immediate vicinity, using local advertising and perhaps a loyalty scheme for regular customers.

In conclusion, market segmentation is a crucial aspect of marketing strategy planning. It allows businesses to understand their customers better, tailor their marketing efforts to specific groups, and ultimately, increase their chances of success.