Welcome back again to our discussion on The Truth About Marketing. For those of you new to the series let's take a moment to briefly review parts one and two.

In part one we talked about what marketing isn't. In part two we began our discussion on what marketing is. We started with some basic definitions associated with the marketing discipline and began walking you through a scenario that applies the tenants of marketing to the beginning, middle and end of the business process. This included a discussion on identifying target markets, market voids, and the relevance of a macro-push versus macro-pull approach to deploying marketing. If you have not read parts one and two I recommend that you take a moment to do so prior to reading part three. 

Keeping in mind that a market is composed of individuals or businesses that share common needs and common characteristics, in order to successfully penetrate one or more markets requires that you profile them in an effort to better understand their needs, wants and desires. The primary tool used to profile a market is market segmentation, so let’s spend some time together discussing what market segmentation is, its various components and how they are used.

Market segmentation is dividing a market into distinct subsets, or “segments”, that behave in the same way and have similar needs. 

Segmentation occurs within different variables, these are geographic, demographic, psychographic and behavioral.

Here is a brief look at the segmentation variables so that you clearly understand these in principle. 

• Geographic – Looks at the region or regions you intend to sell to, the size or density of the area being targeted, type of environment (metropolitan cities, small cities, towns).

Demographic – Profiles individuals or businesses you target based on set parameters. For an individual, it is often by age, gender, education, occupation, income, religion, nationality, race, language and socioeconomic status. For a business, it is often  based on industry, # of locations; headquarter location, products, # of employees, annual sales.

Psychographic – Profiles individuals by personality, life style, attitudes, morals, and personal values. Profiles businesses by corporate culture, management background, management style, etc.

Behavioral – Profiles individuals and businesses by product use, brand loyalty, benefits sought, the readiness-to-buy process, decision-making process and profitability.

By taking the information gathered from these variables, and in some cases combining them, you will develop a buyer profile; that ‘profile’ will become the ‘customers’ best suited for your products or services.  Your marketing strategy will then be prioritized and directed toward the buyer profiles.

As you give further thought to market segmentation, and as a practical exercise, you may wish to take a moment and profile your current customers using the market segmentation components introduced in today’s discussion.

For each market segment you will next apply the marketing mix. The marketing mix, also commonly referred to as the 4 P’s will be the focus of Part IV in our series on the The Truth About Marketing.

Ultimately, your ability to effectively target and penetrate one or more markets in a cost effective and efficient manner will depend in large part on your use of market segmentation and the market mix within an overall strategic marketing plan.

Stay tuned for The Truth About Marketing Part IV.