Many market segmentation experts define market segmentation as the process by which you separate a target market from the mass market. Thus, when they refer to a segment, they refer to what I call a target market.

Market Segmentation – My Definition

I use slightly different terminology. Instead of referring to a specific market within the mass market as a segment, I refer to that market as a target market. Likewise, instead of using “segment” to refer to a target market, I use it to refer to a demographic variable, from which psychographic and behavioral characteristics can be determined.

Criteria For a Target Market

As a result, I consider several demographic variables as criteria necessary to determine a target market. These include age, occupation, education level, gender and race or national origin.

You may notice my different use of terms when reading the report on my matrix market segmentation process.

Simplifying Market Segmentation

This process simplifies market segmentation. It starts with demographics because most business owners know at least some demographic characteristics of their target markets. It then uses a systematic process to determine psychographic and behavioral characteristics based on the demographics.

By considering all the characteristics across different demographic segments, you can determine four to five shared characteristics that will effectively communicate with and relate to target market members.

In addition to defining segments and necessary criteria differently, my matrix market segmentation process also differs from many other market segmentation processes because of what it doesn’t require. It enables you to gather significant information about a target market without the technical skills, computer software or statistics required by most market segmentation processes.

You can get more information on market segments at the following link: Criteria Necessary For A Market Segment: Measurable and Identifiable

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Posted 5-22-08: Market Segmentation:
Defining Market Segments

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Market segmentation may be new to you so you’re not sure why you should bother learning about it. But continuing your education is a constant way that successful business owners insure their success.

An Illustration

To illustrate the importance of educating yourself about everything relating to your business, let me tell you a story about a high school classmate.

I grew up in a small town in eastern Oklahoma. One of my high school classmate’s father owned a small grocery store there. When my classmate graduated, he went to college to study business.

I remember thinking that he didn’t need to go to college when he could just learn from his father and eventually take over the family business. But boy, was I wrong.

After graduating he worked for several large companies that required leaving town, but when his father died, he moved home and began operating that small grocery story.

In just a few years, he put a larger grocery store out of business and moved into it’s larger building. Then he opened another grocery store in a town 10 miles away.

Now he owns a grocery store in nearly every small town in eastern Oklahoma and is a very wealthy man. Had he never gone to college and studied business, he’d probably still just be operating that one small grocery store.

How Much Do You Invest In Your Continuing Education?

Now I’m not suggesting that you need to get a business degree to operate a successful small business, but you do need to continually increase your business knowledge and consider the time, effort and money required as an investment in yourself and your business.

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Posted 5-16-08: Market Segmentation
And Continuing Your Education

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Market segmentation is a rather sophisticated topic. I’ve been writing on this blog since Feb. 14, 2008 publishing a five days a week. During that time, I’ve provided lots of good solid content on market segmentation and related marketing topics, but haven’t done anything very personal.

Market Segmentation and Language Use – An Example

So today, I want to tell you a story about my son to illustrate how using your target market’s language can help you to communicate and market better.

When my son was about three, his dad, Gail, and I were raking leaves on a warm fall day in Mississippi. Our yard had a privacy fence, and Gail was warm-natured, so after working a while he went in the house to cool off.

So I took a break and was swinging my son, Darby, on a tire swing that hung from a large live oak tree in the back yard. When Gail came out of the house bare-chested, Darby looked at him and exclaimed “Daddy’s got on a naked shirt.”

Gail and I both laughed at his ingenious way of putting together two words that he understood to express what we would refer to as “bare-chested.” Now that I see it, “bare-chested” is also two words that someone put together a long time ago to express this state of dress.

Market Segmentation and Language Use – Your Take-away

The market segmentation take-away from this story is that people use language differently. Some use it quit creatively. It’s important to know how your target market uses language. The best way to learn that is to go where they congregate and listen to them.

Your target market may express themselves on forums, groups and even some blogs. So “listening” may actually mean reading and paying attention to the language your target market members use. Then adopt some of that language for your sites, blogs, sales letters etc.

To read a funny story about my daughter, click the link below:

False Assumptions About Your Target Market

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Posted 5-08-08: Market Segmentation
and Language Use

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Your business profitability goal is vital to your business’ success. If you commit to your goal in writing, your are far more likely to reach it than if you don’t.

You are in business to make a profit, aren’t you?. So I’m sure that you have a business profitability goal. Have you committed it to writing? Do you know how using market segmentation to identify and learn about your customers and target market enhances your ability to reach your goal?

Many business experts contend that profit is the reward for giving customers what they want for a price they are willing to pay. Of course, to make a profit, that price has to reap you more income than it costs you to produce, market and distribute your product. This involves many business practices. Not the least of which is marketing.

Your Business Profitability Goal And Market Research

When you think of marketing, you may just think of tactics that you can use – like news releases, publications, special events, and advertising. You probably don’t think much about marketing research. But marketing research can help to reach your business profitability goal.

One of the most important types of marketing research is market segmentation. It provides you with information to identify your best target market. You have selected a target market haven’t you?

To reach your business profitability goal, you need to direct your marketing efforts to a specific target market. Then you need to learn everything possible about that target market. Then use that information to guide your marketing strategies and tactics. Market segmentation will enable you to discover the best marketing appeals for your target market.

Market Segmentation Enhances Income To Reach Your Business Profitability Goal

It does so by helping you to:

1. reach your target market by revealing what media they use,

2. create marketing messages that appeal to your target market members’ needs and desires,

3. position your business, products and services to attract your target market,

4. convert that interest into first-time sales,

5. build a positive relations your first-time customers to persuade buy from you again,

6. win your customers trust by building good customer relationships.

If you think about it, the above six abilities are what determine your income. Income determines half of your ability to reach your business profitability goal. The other half deals with limiting your expenses.

Market Segmentation Saves Expenses To Reach Your Business Profitability Goal

Market segmentation also influences expenses involved in making sales. It enables you to identify a target market and to improve how you market to its members. This saves you loads of money over trying to market to everybody, or wasting money on ineffective marketing tactics and messages.

Of course, you will still have expenses like product development, distribution, personnel, etc. But market segmentation can also save you money with these expenses.

For instance, by knowing your target market and what they really want and need, you avoid wasting money developing products that don’t have good profit potential. You also avoid costly features that aren’t important to your target market.

Market Segmentation Helps Improve Distribution To Reach Your Business Profitability Goal

Market segmentation also influences what distribution methods that you use to deliver your products. By knowing how your customers prefer to get their products, you can focus on that distribution method, fine tune it, and make it a distinguishing characteristic. Plus, you can often save money by using one distribution method consistently.

Your Business Profitability Goal: Conclusion

In conclusion, market segmentation can help you to reach your business profitability goal by helping you to get new and repeat customers. This improves your income.

Market segmentation also helps by providing information to guide your spending decisions.

By improving both income and expenses, market segmentation helps you to reach your business profitability goal.

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Posted 5-08-08: Market Segmentation And
Your Business Profitability Goal

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Market segmentation can improve your small business marketing and help you to avoid wasting you small business marketing resources.

A thorough discussion of wasting your small business marketing resources are covered in my article, Three Mistakes That Waste Small Business Marketing Resources. If you came to my blog because you read this article or another version of it, you’ll find information to help you improve your small business marketing at this blog and related site.

Market Segmentation Helps You Use Resources More Effectively

Both cover how market segmentation helps you to use your small business marketing resources more effectively. With market segmentation, you can base your marketing decisions on accurate and complete information about your target market.

Do you waste your small business marketing resources because you haven’t selected a target market or don’t know enough about your target market to market effectively to its members?

Market segmentation can help you to identify the best target market for your products or services and to discover the most effective appeals for that target market.

You can read more about marketing that’s appropriate for small business at the following linked pages:

Examples Of Cause Related Marketing

Types of Advertising Appeals

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Posted 5-07-08: Market Segmentation
for Small Business Marketing

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