Monday, May 2, 2011

Market segment analysis

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Segments are a way of understanding your customer’s needs and wants and developing your marketing strategy around them to target the segments that in one’s expert opinion will perform the best. Since segmentation can be a very broad area there are many ways of gathering information, but you must focus on one that will yield the best results for the information that you are looking to examine. For example, it is more cost effective for a telephone company to conduct their analysis by looking at their customer’s bill and finding their average phone usage on either long distance or local. From there they can determine who to telemarket for a more attractive long distance plan.

Information can be gathered through the use of written or verbal surveys, electronic databases, by a marketing firm (such as Information Resources who electronically track consumer’s purchasing behavior through UPC scans), or US. Census reports. One must watch how information is gathered though to give a true segmentation analysis. For example Price Waterhouse recently performed a telephone survey for the city of Alberta in which they were trying to determine what method the citizens preferred to contact their government. Page 6 of my backup clearly shows that the citizens clearly proffered the use of the telephone to contact their government. One must ask themselves if the survey is in fact accurate since the survey was conducted by telephone. Findings my present that the persons who completed phone survey just liked talking on the telephone while others who did not choose to participate in the survey did not like to use the telephone thus making the results inaccurate.

With the recent introduction of the internet there are new ways to conduct market research. This is very beneficial to the small firm or local government since they might not have funding for performing a segment analysis of their own. Survey information that is gathered in the form of a survey on a web page and linked to a database is a low cost method of quickly gathering information and sorting it into a logical and beneficial analysis. One must be careful on the types of questions asked on such survey seeing that the information is being gathered in such a way that a person must be able to have some computer skills in order to answer the survey, such as in the above Price Waterhouse analysis.

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One note of caution, one must always use good judgment when reviewing survey information. Unlike a physical sales database, the information gathered in a survey is not always factual and or accurate.

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