Blog of an Internet Marketer

June 30, 2014

Segmenting your online marketplace

Filed under: marketing — Enam @ 8:20 am

Market segmentation is a very important part of marketing plan. This is particularly vital for small businesses since a small business never can target to reach all the market segments with its limited resources. With proper and wise segmenting, an organisation can concentrate its marketing activities on few target segments. Some bulk marketing techniques operate without segmenting the market. For example bulk email marketing sometimes operate without any market segmentation. But segmentation is considered as pivotal in modern marketing concepts.

Following are some reasons why an online marketing campaign needs to segment the online market:

  1. To increase ROI of marketing campaign.
  2. To increase sales.
  3. To reduce cost of marketing campaign.
  4. To avoid spamming.  Non-targeted marketing activities are sometimes termed as spamming.
  5. To increase customer loyalty.

Following variables are widely used for segmentation:

  • Demographic factors like income, age, education, gender
  • Geographical factors like city, rural, country, zip etc.
  • Life style
  • Buying pattern
  • Psychological factors
  • Social factors like social values, social status etc.

The most common segmentation technique is to use a combination of suitable demographic and geographic factors. The online marketplace can also be segmented using above factors. Most of the PPC advertising platforms like AdWords, Facebook allows to segment the market based on geographic and demographic factors.  Using other segmentation variable to segment the online marketplace may be a little bit difficult and tricky although not impossible. For example, e-Commerce sites can easily do segmentation based on buying pattern. eCommerce sites keep record of buying history of each customer. Analyzing those records an e-commerce website may give special offers to frequent buyers or large volume buyers.

Segmentation is required for designing proper marketing mix. Different marketing mix may be required for each target segment. For examples,  LinkedIn may be the best medium to reach the professionals, Pinterest may be the best medium to reach fashion conscious women and local classifieds website may be the best medium to target a small area of a city. So segmentation should be integral part of an online marketing planning.


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