Before now, manufacturers of products had relied on segmenting the market to get to their target audience, but today, the story is not the same, companies have employed other mechanisms likeÂ promotions, educational offers, free gift in packs, buy one get one offer etc. So, if you want to reach your target market forget demographics. This kind of segmentation creates a profusion of possibly misleading data. There is a better way to score the bullâ€™s eye.
Everyday, consumers are exposed to a number of advertisements, which they react to in some way. Marketers in this regard base their strategies on these reactions, and so try to better understand the consumerâ€™s decision-making process. A commonly used approach is to cluster consumers according to their attributes.
Ask advertisers, marketers or business owners how they define their target audience, and they will likely tell you that it is along demographic lines: attributes such as age, gender, nationality, place of residence, marital status, number of children and income. Sometimes they would have gauged consumer opinion of some or other product, service or perhaps would have gleaned something about their target market aspirations.
In this, you would not expect them (Consumers) to use same kind of mobile phone, driver the same car and enjoy the same food?. The answer will definitely be no!.
In reality, many people with a limited income have high aspirations. On the other hand, wealthy persons insist on living modestly. What should this be telling consumers?. This showsÂ that when demographics is used as the sole basis of our segmentation model it ends as an inconsequential information. If a company is offering a car, there is no need asking a potential customer what colour of car he or she requires, if there is no way to ascertain what kind o car needed.
The inability to gauge the correct reaction of a target segment leads to a diluted product or service, one that dimly appeals to everyone.
To make matters worse, some marketers believe that their product or service should not be limited to a certain segment, but should be offered to everyone.
In aiming to be the next market leader, companies now devise a campaign that targets everyone, a mistake commonly made by small businesses.
Now that companies know what not to do, What should companies do?. What companies should do is segment the market based on the benefits they are promising. This will result in a number of segments, each with its own demographic mix.
Within each segment will be consumers of different ages, incomes and nationalities, for instance.
What the segment will have in common is desired benefits that product or services promised. The reaction of all the individuals falling within the segment will be the same.
This refers to End Benefit based segmentation (EBBS). Although, this acronym still new, but,Â there is growing recognition of the effectiveness of this approach. Take credit cards as an example. Card vendors, though not particular with Nigeria, typically treat level of income, employment status and age as key criteria for segmenting their customer base.