One-size-fits-all’ approach for customers of today’s marketplace is not possible.

Think about it. Not all your customers are the same! They do not buy the same things, with the same spend or even with the same frequency. So, what should be done?

Well, the solution is to leverage the power of ‘customer segmentation’. This involves breaking down your target customers into different and homogenous sub-groups based on various shared characteristics.

After all finding out the disparate needs of different sub-groups makes it easier to come out with a product that meet the customer needs. When customers find the product pertinent to their requirement, they are influenced into buying it. Here are the four main customer segmentation models that are particularly used to divide markets to find and target the right audience.

➡️Demographic Segmentation (the who) - Dividing the market through different variables such as age, gender, income, education level, family etc. For example, H&M used age-based demographic segmentation to push their trendy apparel amongst the university students. They segmented their existing customers based on their age, grouped those falling in the student age-ranges, and offered discount, resulting in massive increase of their sales and revenue.

➡️Behavioral Segmentation (the how) – Forming groups based on their behavior, the way the population respond to, use or know of a product. For example, Olay brand through its Skin Advisor app got to know that a large number of its customer base wanted fragrance free products. Subsequently, after this information they went ahead with their manufacturing and in short time they saw a rise in their product sales.

➡️Geographical Segmentation (the where) - Identifying & grouping customers based on their physical location such as country, region etc. For example, brands that typically sell winter apparel such as Burton should market their products in areas that are cold all year-round, because they would probably fail to profit by marketing to warmer climates.

➡️Psychographic Segmentation (the why) - Forming groups according to psychological traits that influence consumption habits drawn from people’s lifestyle and preferences. For example, Porsche divided its customers based on their lifestyle choices, personality traits, and values. The company then constructed specific profiles for each list, such as ‘The top gun’ for ambitious individuals who desire power and want to be noticed. This allowed Porsche to create personalized content & to distribute relevant content to the right customers.

 Understandably you cannot please all customers. But then through dividing your larger market into sub-groups you will be able to tailor your product design, marketing efforts, & sales process to the people who will actually be interested in your product, thereby positioning your business for maximum success!

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4 factors to consider for assessing if you are rightly positioned to enter a new market?

 For companies seeking growth, entering a new market is indeed an appealing strategy.

Sometimes the new ventures offer far more opportunities from the segments currently served; while at other times the neighbouring markets are attractive because of the seemingly lower-risk opportunities they offer.

But whether distant or close in any sense, forays into new markets often present unforeseen challenges.

If you are unsure whether you have the right market positioning strategy or not, then it is essential you evaluate these four success factor – company uniqueness, current market position, competitor positioning analysis and lastly target customer segment.

Key Factors That You Should Consider for Correctly Pricing the Product: Ken Research

 Whether you are making a purchase of a high-end item such as a laptop, car, or even of a small item such as footwear, t-shirts, the first thing that usually most of us look at is the – ‘Price’. Hence, it goes without saying that the pricing of the product is one of the most vital factor that impacts the decisions of most customers, and determine its success or failure.

More importantly, price is the only revenue-generating element in the marketing mix, while all other elements represent costs. However, many at times, marketers are seen to fail in optimally pricing their products, resultantly face losses or even hurt their brand reputation.

For example, the leading automotive brand Tata Motors launched the Nano car and labelled it as ‘the cheapest car’ with the intention to attract the lower-middle class families by offering it as an option that would fit into their budget. However, Nano did not work in the market in the long run. And, why? Well, the major reason being they overlooked the fact that in country like India a car is a status symbol, and so positioning it as a ‘cheapest car’ backfired with people not wanting to buy a car that was so obviously targeted at lower income groups. Hence, here the company lacked in reading the target customers and simply based the product assuming that lower price would deliver the best result.

So if you are planning to introduce a new product or service, or considering price changes for your existing ones, here are the key factors that you should consider for correctly pricing the product, and thereby creating a higher profit margin.

👉 Know Your Customers – The first important factor is definitely knowing what your customers want from your product / service. Contemplate on what role does pricing plays in their purchase decision such as - are they driven by the cheapest price or by the value they receive? Once you have all such information, it will help you decide if your price is right, and also if you are targeting the right market.

👉 Market Positioning - Once you understand your customer, you need to look at your market positioning. This simply means considering - what is the market in which you want to sell you product or service – high or low end market or someway in the middle. Once you have decided, you will be able to reach your ideal pricing.

👉 Competitors’ Pricing - Consider competitors’ product pricing strategy as to what are the price they are charging for their products? Or what customers are they attracting with their pricing? The answers to these questions will give you an industry benchmark for your pricing.

👉 Costs - Before you set product price, learn everything about the costs involved with running your business which includes of - Fixed Costs & Variable Costs. Your business will fail if it sells for less than cost, or if its gross profit margin is too low to cover the fixed costs of the business.

So, how do you determine your pricing?  Comment Below.