Importance of Market Segmentation
Effective market segmentation is a fundamental aspect that helps build successful marketing initiatives. It is defined as the process of segmenting customers into homogenous groups based on their preferences, thus, enabling each segment to be addressed by specific marketing strategies. Furthermore, considering the competitiveness in today’s market, businesses will not be able to withstand the competition if their marketing strategies are aimed at targeting the entire audience as a whole.
The importance of market segmentation is that it empowers businesses with the ability to reach out to end-users with specific requirements. However, this proves to be beneficial in the long run as employing different types of strategies enables the effective use of corporate resources and strategic decision making.
Types of Market Segmentation
While analyzing the importance of market segmentation we are more disposed toward behaviors, lifestyles, psychographics, and business values. But in reality, it is much more than that, market segmentation is a broad concept that includes different types of market segmentation methods, which apply to different industrial segments. Let’s review a few commonly used segmentation methods:
- Distribution segmentation: Different distribution channels exist in different markets, this method is the commonly adopted process among the different types of methods as it enables firms to reach each market using a different channel.
- Geographic segmentation: Market players often tend to focus on particular regions to maximize their profit margins. Though regional differences among consumers are a major differentiating factor, it often proves to be a fundamental aspect that supports geographic specialization.
- Price segmentation: Price segmentation is a widely adopted method, where markets are segmented on the basis of different price dimensions.
Client’s Background:
The client is a market leader in the chemical industry in India, with several distributions channels spread globally.
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Client’s Challenge:
The client, who is well known for their contributions to the chemical industry in India, was looking at gaining a detailed understanding of the different consumer personas so as to ramp up their marketing initiatives. The chemical firm’s marketing initiatives lacked focus and were generic, as a result of which, they were not very effective at generating sales leads. Hence, the chemical industry client approached Infiniti Research to better understand the importance of analyzing consumer behavior and preferences with regards to their product portfolio.
Business Impact:
The process began by assessing the different types of segmentation methods to identify the right one to segment the market into subgroups and devise effective strategies to target key segments. By doing so, the chemical industry client was able to prioritize their product development initiatives with the corresponding roadmaps that were developed based on the approved market segments. Moreover, this aided them to understand the importance of optimizing limited resources to target markets with the highest potential.
Future of the Chemical Industry in India
The chemical industry in India has experienced a steady growth rate over the past few years, which is why business leaders across economies now prefer investing in the Indian market segment to enhance their profit margins. The key drivers of success in the Indian chemical industry include its proximity to new markets and ongoing developments in the field of petrochemicals. Also, the chemical industry in India is one that is backed by a robust GDP growth rate, which makes it lucrative for companies to invest in the Indian chemical industry.
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