Understand Your Overall Market

Your overall market is the group of people who can benefit from using your
products and services. But sometimes, the overall market is so large that
marketing efforts would have a shotgun effect, hoping to hit a buyer rather than a
focused laser finding the perfect buyer. For example, a car dealership might say
that anyone who has a driver's license looking for a car is part of its target market.
That's a lot of people to market to, and it doesn't give you much to differentiate
yourself from the competition.

Look for Micromarkets

Micromarkets are the segments. These are the markets within that larger market.
An insurance agency could say that the target market for life insurance is anyone
between the ages of 18 and 80. But within that age group, there are other more
specific markets. You have young parents with a desire to protect their children.
You have aging parents worried about estate planning. You have people who had a
major medical issue, but now are healthy and they need life insurance. Each of
these are smaller segments of your bigger market.

The marketing message to each of these segments is different. You aren't going to
give a 65-year-senior woman the same pamphlet for life insurance as you would
the 32-year old couple. Her needs are different from those of the couple. The
person who has recovered from a major illness has a completely different set of
needs to address in searching for life insurance. Understanding this is the value of
market segmentation and in getting your advertising messages right.

Market segments are not always based on general demographic information. You
could target segments based on details such as buying habits, political affiliation,
favorite pets, or travel habits. When you understand how your product effectively
helps your market, you are ready to build an advertising campaign.
How to Segment a Market

Divide your market into micromarkets, or segments, based on segmentation bases

or variables. The most common segmentation categories and corresponding bases
include:

 Geographic: Dividing by geographic basis, such as country, region or city.

 Demographic: Segmenting based on age, occupation, marital status or other
identifiable population characteristics.
 Psychographic: Segmenting by consumers' opinions, lifestyles and interests.
 Benefits Sought: Dividing micromarkets based on the specific benefits
consumers seek from your product, such as status, convenience or value.
 Behavioral: Segmenting depending on consumers' relationship with your
product or firm (e.g. brand-loyal or not, heavy users or not).

To segment your market, start by choosing a category and relevant base, then a
few examples. For example, you could segment your market by demographic based
on age group, which may break down into children, teenagers, young adults and
older adults. You might also segment your market by behavior based on their
shopping style, which could further divide into consumers who enjoy shopping,
those who only shop when they have to and those who actively avoid it.