What is Market Division?
Market division, also known as market segmentation, is the process of dividing a broad consumer or business market into sub-groups of consumers based on some type of shared characteristics. This allows businesses to target specific groups more effectively.
Why is Market Division Important?
Market division is crucial because it helps companies to
identify and target the right audience. By understanding the specific needs and preferences of different segments, businesses can tailor their
marketing strategies, products, and services to meet those needs more precisely. This leads to better customer satisfaction, increased
sales, and higher
market share.
Types of Market Division
There are several ways to divide a market: Demographic Segmentation: This involves dividing the market based on variables such as age, gender, income, education, and occupation.
Geographic Segmentation: This type of segmentation involves dividing the market based on geographical boundaries. It can be as broad as a country or as specific as a neighborhood.
Psychographic Segmentation: This focuses on the lifestyles, interests, and values of consumers.
Behavioral Segmentation: This is based on consumer behaviors such as purchase patterns, usage rates, and brand loyalty.
Research: Conduct thorough
market research to gather data on your potential customers.
Identify Segments: Analyze the data to identify distinct segments within the market.
Evaluate Segments: Assess the viability of each segment by considering factors like size, growth potential, and competitiveness.
Target Segments: Choose the most viable segments to target.
Develop Strategies: Create tailored marketing strategies for each target segment.
Challenges in Market Division
While market division offers many benefits, it also presents some challenges: Data Collection: Gathering accurate and comprehensive data can be difficult and time-consuming.
Changing Markets: Consumer preferences and market conditions can change, making it necessary to continuously update segmentation strategies.
Resource Allocation: Targeting multiple segments requires significant resources, which can strain smaller businesses.
Examples of Market Division
Many companies have successfully implemented market division to boost their business: Coca-Cola: This company uses demographic and psychographic segmentation to market different products to various age groups and lifestyle preferences.
Nike: Nike employs behavioral segmentation by targeting athletes and fitness enthusiasts with specialized products.
Apple: Apple uses geographic segmentation by offering different products and prices in different regions.
Conclusion
Market division is a powerful tool that enables businesses to better understand and serve their customers. By carefully segmenting the market and tailoring strategies to meet the specific needs of each segment, companies can achieve greater
efficiency and effectiveness in their marketing efforts.