Empower your business with lead segmentation for planning

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a century ago a local general store owner would have known all of his customers personally he would be familiar with their families their businesses where they lived and how they spent their leisure time and what they were interested in spending their hard-earned money on this type of marketing is called one-to-one because the business was able to think and act in terms of individual consumers and their households although technology is making it easier for firms to gather information and learn what customers really want few businesses can get to know all of their customers on an individual basis moreover it's not always necessary to know individual customers because in many markets there's large groups of customers that are very similar the purchase of ketchup is one example imagine that we were able to classify every individual Canadian based on what they want when they buy ketchup given unlimited resources we could talk to each household and learn about their ideal version of the condiment we could record their buying habits conducts surveys and facilitate focus groups we might even spend time in the consumers home observing how when and why they use ketchup ultimately the return on that investment is unlikely to justify such an in-depth market research study simply because consumers preferences are not that unique for many products some may want ketchup that's a little sweeter a little spicier produced by a particular brand and so on based on a few key features of the product such as price quality and brand name we can create groups of Canadians that care about the same things and base their buying decisions on the same factors maybe we find that most people fall into one of three camps for example we might have segment a that's price sensitive and buys primarily on price segment B we'll call them the tasters buy primarily on taste and a small segment C organics who only buy ketchup made from organic ingredients we could dig deeper and develop a more fine-grained model of Canadians ketchup preferences for example exactly how price sensitive is segmentation what flavors really make a difference to segment B and how much more segments si willing to pay for organic ingredients ultimately how far we break the market up into groups with distinct preference profiles depends on whether or not investment and more detailed segmentation schemes justifies that cost as it turns out the ketchup market tends to be mostly homogeneous the vast majority of people prefer the taste of Heinz 57 and that preference drives our purchasing behavior good market segmentation means finding potentially profitable customers who prefer particular combinations of product attributes once a business knows what customers want in the products they buy it can talk to manufacturers and wholesalers to see what products are available and how closely they match the needs of those individual segments however most businesses realize that having the right product the right price is not enough modern consumers needs and desires go well beyond the basic products they purchase for example many consumers want the sense of confidence that comes with buying familiar brands they tend to prefer to shop in a comfortable and convenient environment some consumers may want to patronize only businesses that reflect their personal values through initiatives such as local community involvement or environmental and social responsibility in other words people do not just prefer certain products they prefer an entire process of meeting their individual needs the ability to understand those needs on a segment by segment basis is the foundation of successful marketing