6 Differences Between Market Segmentation and Target Marketing
An important step in planning marketing activities is to determine the segmentation and target market. You may be wondering about the difference between the two parts of the marketing process. So, what are the differences between market segmentation and target marketing in determining consumer targets?
Despite the differences, market segmentation and target market are two interrelated processes in selecting product promotion targets. Companies can determine market segmentation which must then be followed by target market research at a later stage in order to target more specific consumers.
That is why it is important to understand the segmentation and target market before doing consumer research. Check out this article so you can better understand the difference between the two marketing processes!
Differences between Market Segmentation and Target Marketing
The following is a complete discussion of the differences between market segmentation and target marketing.
From the start, market segmentation and target market have different meanings. Market segmentation is a step to identify target customers into certain groups. The identification is carried out based on demographic factors (age and gender), geographical factors (customer location), socioeconomic conditions (upper, middle, or lower class), and behavior (shopping habits or looking for the desired product).
Read Also: 6 Benefits of Studying Consumer Behavior for Businesses
The characteristics of effective market segmentation are as follows:
- Market segmentation can be measured so that there is an estimate of the size of consumer segmentation.
- Market segmentation can be accessed more easily by the company so that promotions run smoothly.
- The selected market segmentation should bring benefits to the company.
- Market segmentation must have a low level of competition intensity with competing companies so that the marketing process will not be difficult.
Target marketing is part of market segmentation which is a more specific business consumer goal in promoting their products or services. The target market can also be a potential successful target customer for the company. The reason is that the target market contains a group of consumers who have needs or wants that are more relevant to the product being offered.
There are three strategies for determining the target market, namely:
- Standardization: offering the same product to different market segments followed by finding market segments that accept the product well.
- Differentiation: offering different products according to the needs and expectations of different market segments.
- Focus: a combination of standardization and differentiation strategies to meet the needs of certain market segments.
Market segmentation serves to conduct overall market research. Consumers from market segmentation research are then grouped into various categories based on their demographic, geographic, socio-economic, and behavioral conditions. You can also understand the overall market conditions through this market segmentation activity.
Meanwhile, target marketing functions to find the best market groups based on the results of market segmentation that have been carried out. After determining the target market, the company will be more concentrated on marketing its products to that target. The marketing process runs more effectively because the company can reach a more relevant target market.
Read Also: 6 Benefits of Market Segmentation that Can Help Your Business
Market segmentation uses indicators such as demographic categories, behavior, geography, and socio-economic conditions of consumers. Target marketing also uses the same features, only more specific and tailored to the products a company wants to market.
Usually, the main indicators in the target market include the age, nature, and character of the customer. Companies must select relevant market segmentation groups so that their products can reach the right target market.
The objectives achieved through segmentation research and target marketing are also different. In market segmentation, you study the overall consumer population based on the indicators used. You also understand their way of meeting those needs and wants. Target marketing has a different purpose, which is that you focus on promoting products or services to predetermined target consumers.
You also need to pay attention to the scope in determining market segmentation and target marketing. Market segmentation focuses on the market population as a whole which is then followed by you dividing it into certain groups. Target marketing has a narrower scope, where you select one or more target market groups as a more specific promotional or sales target.
There are three stages in the marketing process consisting of segmentation, targeting, and positioning. Market segmentation is in the first stage because you study the condition of the market or consumers as a whole, including understanding their behavior and how to shop. Meanwhile, target marketing is in the second stage because you already have a group of consumers who are the target market for your product or service.
There is one more step that must be done, namely brand positioning. At this stage, you select the relevant marketing channels to reach and promote the product to the target market. For example, you promote a product using social media to a target market of millennials who like to shop online. The right positioning strategy will make your brand or product more recognized by the target market.
Read Also: The Use of Technology to Analayze Customer in the Millennial Era.
After understanding the differences between market segmentation and target marketing, you can do research to find out your target consumers. There’s no need to use conventional methods of customer research anymore, especially if you have a start-up company and want to promote financial applications.
Just use the Electronic Know Your Customer (EKYC) Profind system from AdIns to make the target market research process easier. Profind has been connected to 10 well-known online services so that you can find out the profile of prospective application users accurately and quickly. Curious? Contact us through WhatsApp right now to enjoy the demo version of this EKYC system and its full version in determining the differences between market segmentation and target marketing for your company!
Have you understood the difference between market segmentation and target market after reading this article?