Eve Lenkowsky’s first Thursday Night Insight shows us why careful segmentation of our target markets is vital to survival.
At the risk of coming off as the dorkiest member of B2B International, I’m going to tell you about my latest hobby: fish. That’s right, I’m a ichthyophile. Say that one 3 times fast.
When I bought my fish tank a couple of months ago and began planning out the aquatic wonderland that would house my flippery little friends, the possibilities seemed endless. The tank can hold 30 gallons of water, and that means a whollllllle lotta fish. My childhood days of little fish bowls and dime goldfish were a thing of the past.
With the tune of "Under The Sea" playing in my ears and images of delicate angelfish, friendly flounder, and funky-looking bottom feeders dancing through my head, I waltzed into PETCO and told the pet store people about my "vision." The fish lady smiled as I pointed out which fish I liked, and she told me a few facts about each kind—it was all very educational. Everything was going great…until I told her I wanted all of them. Apparently, that idea was dead in the water.
You see, every species of fish has its own narrow range of water pH levels that it prefers to live in. If you put a fish in water that goes outside of this range, it will suffer or die. But when a fish is in the right kind of water, it can flourish and prosper. I wouldn’t be able to take home that whole assortment of fish because they wouldn’t all be able to live in the same tank together, no matter how large it was. So realistically, to make my tank the best it could be, I had to acknowledge the fact that I would have to make choices. I couldn’t have all of the varied types of fish I wanted since they all had different needs and behaviors, but that didn’t mean I couldn’t still have a really cool tank.
I asked the fish lady to help me categorize the species that I liked by their approximate pH level needs. To make things easy, we created three basic segments: the acidic-dwelling fish, the neutral pH fish, and the fish that need a more alkaline environment. With that settled, I would just need to choose one of the three segments I’d identified, then design my tank around the types of fish I’d chosen within that segment. This would let me make it an optimal environment for them to live in and also for me to enjoy visually—win/win.
The same thing can go with b2b market segmentation studies in market research. Segmentation is crucial to marketing because once you identify the segments of customers or prospective customers that you want to do business with, you must set different marketing objectives for each segment. Identifying segments through market research allows you to compare and contrast how portions of your customer base might react to various marketing concepts, pricing, advertising copy or visuals. Essentially, you can test various tactics in terms of product, price, promotion and place (route to market) and see how they stack up among your segments. You can also figure out if their needs or desires differ or have any overlap.
Every business, no matter how much money it throws into its products or marketing, has a finite amount of resources and must make choices about how to use them. Just as I created a beautiful environment and found a rich assortment of pH neutral fish to fill it, so too must businesses identify the best segments to target and fine-tune their offerings according to the segments of choice. Market research helps you to figure out how your offerings and positioning concepts will be viewed by various groups based on their firmographic characteristics, behaviors, or needs. Make your choice, choose your best bait, and go get those customers!
