A business in GCC or other region, after it has determined its target market, may fragment the customers into groups using segmentation strategies: the customers most probable to purchase its services and products. Customers in these segments have one or more similar characteristics. With the help of this information, the person responsible for marketing of a business can develop exact plans to interact with these targeted customers successfully. Using segmentation, companies are able to build relations and loyalty of customers if they provide goods and services according to their requirements. There are a lot of diffident variables of segmentation of overall market that a company can apply, but there are several of them that are most frequently used for segmentation of customers.
The Demographic Strategy
Using Demographic segmentation means that you divide the client market by such variables as age, occupation, type of family, gender, income, socioeconomic status, level of education, culture, religion, language and nationality. For example, because of the concentration of a particular nationality or culture some specific product which is highly popular in one geographic region of a country can completely fail in another area. Clothes and toys are typically marketed to particular genders and ages, and some of services are targeted specifically for people in a specific income group, for example nannies, landscapers, housekeepers. In case if your company is targeting families with small children, a strategy of demographic marketing would make you search opportunities for advertising in online newsletters, magazines websites and other identical places that serve this target group.
The Geographical Strategy
Using Geographical segmentation means that you divide the GCC customer market taking into account particular location, and it can be related to the whole country or its region or can be divided further by neighborhoods. Such variables as size of town or city, metropolitan or rural area, climate and type of landscape (beachside, mountains or farmland) can also be used in geographical segmentation. This type of segmentation makes it possible for companies to establish what kinds of products would be helpful or required in particular areas. Let’s consider a case when a company deals with special beach equipment such as surfboards and similar equipment for beach sports - such company type would clearly concentrate its efforts on areas where surfing is a popular sport. This strategy also enables for targeted communication. For instance, it is more probable that your destined target will get your message if you place billboards in a beach area, than in the middle of a city.
The Psychographic Strategy
Using psychographic segmentation means that you divide the customer market in accordance to personality type and social status, lifestyles and values. The Psychographic Strategy segmentation separates the market on the basis of how people are living and responds to the purchase of a product or service. Opinions, attitudes, interests and values contribute to a customer’s vision toward a service or product. Let’s consider a case when a new book is written by a very conservative author. His book may not be popular among people with liberal political views. With the use of this strategy, your company may introduce its products in such a way that they will be attractive to a particular group, in accordance with their status, values or personality. For instance representatives of higher social class can be interested in additional features, services or exclusive sales.
The Behavioral Strategy
This type of strategy divides the GCC customer market in accordance with the information obtained concerning expectations of its customers and their reaction to the expectations. Behaviors can incorporate the loyalty of customer towards a specific brand; the ability to pay the price for the goods or living on a tight budget; the first consumer purchases or repeat purchases; ready-to-buy customers or the ones who are ready to compare with what they have seen elsewhere. The behavioral strategy may also include segmentation according to the intensity on how often customers use the product or service or the way they use it. Let’s consider a customer who uses a service of cleaning once a week and a client who accesses the same service once every six months. Your company can use the knowledge gained through this segmentation strategy for the development of products, if the company understands there is a necessity for additional options of product line to give more variety for regular customers. For example, representatives of higher social class can be interested in additional features, services or exclusive sales.
Market Segmentation Weakness
Orientation on individual market segments may be successful, but there are also some disadvantages in marketing segmentation. Segmentation includes division of groups of people taking into account the characteristics or habits. For example, the dealership in Dubai may separate the population of the region to customers with high, medium and low income, which gives an opportunity to concentrate its marketing efforts on the segments that are more likely to be interested in the types of cars that company aims to sell.
The difficulty in choosing most significant variable is a main limitation of segmentation of the market. The probable criteria for segmentation are gender, origin, age, income level, region, buying habits, personality, life-cycle position and motives. Concentrating on one or several of mentioned factors over the others determines success or failure of your business, as it is very important and risky project.
Creating groups that are too small to be profitable targets is another disadvantage of market segmentation. Let’s consider the car dealership in Dubai, UAE focusing on a narrow income bracket its marketing efforts, due to the fact that this segment of the population is more inclined to purchase their car. If there are too few members in this segment, potential income is too low, no matter how successful a marketing campaign of the car dealership is.
Leaders of the market
Segmentation gives a lot of benefits if your product or service dominates the market. For example, if only you have a bakery in the city, your goal should be to raise awareness, rather than focusing on a specific subgroup. Very few small businesses entirely dominate their markets. At a time when the company is dominant, competitors will not be long off. So it would therefore be useful to consider about which markets to target before it may become late.
Absence of Data
Small businesses, in most cases, do not have data on the study of consumers, so detailed analysis of the market can be a frightening task. The less precise your data and the following analysis are, the greater the likelihood that you will make a mistake during the segmentation of the market. For example, you can decide to target in the segment of high-income population, thinking that only these people can afford your product or service. But the telephone survey, for example, showed that targeting owners of middle-income is actually more lucrative for your business. If you don’t want to have complications like this one, use the services of the firm who are experts in marketing research to assist you in the analysis of your market. Preliminary research costs will save money and they can help you avoid mistakes, which may turn out to be very expensive.
Attitude Factor in Segmentation of the Market
Segmentation of the Market includes categorizing consumers by taking into account some variable or factor, such as attitude of a consumer. With the help of segmenting consumers in accordance with their attitudes, you can come to a decision which groups are better to make your best targets for your marketing efforts. For instance, a company in UAE can make a survey among consumers about their attitude to some new technologies to define which groups will be more interested in purchasing of company’s product.
A tendency of a customer toward specific service or product is his attitude. Consumer may be doubtful about the value of some new technology type or have a negative attitude towards a specific brand because of their past experiences. Attitudes may be of a general type that means that they exist in all consumer segmentations, or they may be different in different groups.
Market researchers in GCC can define attitudes through personal interviews, surveys and focus groups. For instance, with the help of short questionnaire consumers can express their moods about the brand name, while focus group and the personal interview may include an in-depth dialogue about the brand name. Market researchers can establish an assessment of the spectrum of consumer sentiment, using statistical methods of assessment, maybe tying a certain relationship with particular demographics. Consumers of young age, for example, may tend to have a positive attitude towards a specific brand, which is the information that may be used by the company for guidance for future marketing efforts.
The development of reliable predictions about how customers will behave is a general purpose measurement and analysis of consumer attitudes. For example, a consumer is unlikely to buy the product having a negative attitude toward the brand. If the business can determine which customer segments have negative attitudes, it can concentrate on other segment with the highest potential sale perspective. Or the company may try to change negative attitudes and make the segment more profitable. Understanding consumer attitudes helps businesses to effectively interact with different segments of the market. For example, knowledge of the nature of the adverse attitude of a specific segment in UAE helps businesses to organize an effective campaign to resist these particular negative moods.
Changing Attitudes of Consumers
Some GCC companies often are aiming to change the attitudes of particular consumer groups. For example, the research of business market identifies that consumers with high income often think it some company’s products have low quality. Such business can use different marketing techniques to change attitudes and increase sales volumes in this segment. Possible production methods includes improvement of the products, new product design packaging, offering demonstrations in the store to show the strengths of the product and implement advertising campaigns to develop better brand image. Developing a positive attitude in this segment of consumers, the business can increase sales and make that segment to be the profitable target.