5 good reasons to segment the market
Due to the broad nature of the market, product promotion will be too high and unattainable. It needs to be divided into smaller sets so that maximum customer set satisfaction can be achieved. The following are several reasons to segment a market.
1. Increase in profits
With the exception of a few organizations that are not profit oriented, most companies are set up for profit, however customers have different disposable income and their spending sense is quite different as well. Segmenting a market will allow the organization to sell the same product to different groups of customers based on their disposable income. Organizations can improve their profits in this way by increasing their prices for different segments.
2. Popularity in the market
Through careful segmentation and proper targeting, smaller companies can compete with the strongest and leaders in the market. In general, strong companies have an advantage over smaller ones in terms of production and marketing costs, which are much lower, as they are already the choice of customers. But by dividing the market into smaller groups and focusing only on the need of the target market segment, the smaller company will be able to have an advantage in this target segment.
3. Better customer satisfaction
As stated above, the sensitivity of clients is different. So are your needs. By creating independent solutions for each segment, greater customer satisfaction can be achieved.
4. Best opportunity for product sales growth
Market segmentation can generate a sales margin. A customer can be encouraged to sell a product that they have bought before for another (exchange) to improve the sales margin of the latter.
5. Communication flow between the client and the company much simpler
Product manufacturers must advertise and get their message across to a relevant customer audience. And where there is a broad target market, there is a great risk that key customers will be lost and even the cost of communicating with customers will be too high. But if the market has been segmented, you can easily reach your target customers more often and at a lower cost.