A marketing plan is a blueprint that outlines the strategies and methods to be followed by an organization in order to achieve its targeted profits and sales. To arrive at this plan, the company need to acquire all relevant information regarding the intended customers, this calls for the importance of market research. It enables the organization to identify and learn more about its prospective customers. The targets of any marketing campaign are at times individual persons or organizations. The targeted audience is therefore composed of segments that make the whole market.
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A target market is referred to as a set of customers that the business has decided to focus its marketing campaign on and ultimately direct its merchandise to. A well designed target market is the prime element to a good marketing strategy. This target market and the variables of marketing mix (i.e. place, promotion, product and price) determine the product’s success in the market.
Market segmentation concerns the separation of a market of all consumers into components with the same needs. For instance, ‘Pampas’ is a sanitary product particularly markted for children, while ‘Always’ is marketed for female adults. Segmentation thus allows for proper allocation for company’s limited resources. The firm must make choices of serving definite groups of its target consumers. With the increased diversity in tastes and preferences of contemporary consumers, firms are taking caution in the benefits of serving variety of emerging markets.
Segmentation has been therefore the process of separating total market into smaller groups that consist of people with relatively similar or varied needs. Individual consumers with varied product needs are said to have heterogeneous needs. Such classification helps design the needs of selected market segment as they possess same characteristics. Homogenous segmentation is the classification of market segments that exhibit common needs and respond with related trends to market stimulus.
Primary market segmentation if well identified ensures the company’s marketing budget is properly utilized. It allows a marketer manage the marketing efforts by ensuring effectiveness. Primary market segmentation is selected as the one that has much of the sales coming from the group. This iss the group of customers whose needs and wants are vital to match the firm’s products and service strengths.
Some companies do have a clear cut difference between primary market segment and the secondary segment. Other companies have to decide on which market to focus on primarily when there exist several alternatives. In this instance, the secondary market is typically identified and distinguished with the tertiary market, but if both markets possess tremendous valuable opportunities for business, it can decide to invest its marketing strategies to both markets at once.
For example, in a banking business, the primary market segment of the banking services is the customers who deposit their money with the bank. It is the availability of these funds that a bank is able to source out the potential means of investment, should it be by loaning out to needy investors or putting it in real estate investments. These investments opportunities are therefore the secondary segments of a typical bank. Reports shows that current and fixed deposit account holders for most typical banks, account for more than 60% of the total bank transactions as compared to less than 40% of lending.