#DSMMCM1314 Submission 2 Task 1: Target Market Segmentation

Target Market Segmentation

For our PSO (Financial advice) we identified several segmentation techniques, detailed below:

Segmentation Technique	Advantages	Disadvantages
Behavioural targeting based on people searching Financial Advice on Google	•ID which segments seek financial advice more frequently. •Tailor the service to those searching online.	•Multiple corresponding segments can increase marketing costs. •Product proliferation.
Demographic targeting based on consumers career/lifestyles	•Identify which consumer type would provide most turnover. •Find which consumer type would benefit most from our expert knowledge. •Market to one segment; saves resources.	•Narrows the potential market. •Cost to gain information on subgroups can be expensive.
Demographic targeting based on age	•Can cater services to different stages of customer’s life. •Some groups are more easily reachable via online methods.	•Poor indication of customer specific needs. •Does not reflect buying behaviour.
Behavioural targeting based on consumer relationship with our company	•Feedback Analysis •Reduce costs by targeting loyal/current customers. •Can implement promotions to gain loyalty.	•Focusing on one can neglect the other.

We prioritized consumer’s career/lifestyles & consumer relationship with our company.

Justification

Consumer relationship with our company: This tool will identify current and potential customers. Our client identified that they require us to target existing clients. Marketing to existing clients is quicker, cheaper and more effective. Improving these relations can result in repeat service and recommendations to attract new clients.

Issues/risks:

•Narrows the market.

•The focus on new customers could hinder existing relations.

 

Consumer’s career/lifestyles: People of all careers and lifestyles can benefit from financial advice in some form during stages of their life and segmenting this demographic will allow us to identify which segment will provide the most turnover and benefit most from our in-house experts.

Issues/Risks:

•Different segments differ in income and loyalty.

•This method cannot detail service usage from consumer without research.

 

Target Segments

Segmentation approaches:

1)Demographic targeting based on consumers career/lifestyles.

2)Behavioural targeting based on consumers relationship with our company.

Segment	Advantages	Disadvantages	Issues/Risks with discarding	Issues/Risks with choosing
Small Business Owners	May not have their own finance department. Can benefit from multiple services.	Smaller market potential. Require plenty of guidance.		Business could create own finance department. The business may fail.
First Time Home Buyers aged 18-30	No experience, requires support. May use multiple services.	May not be sustainable. May not ‘need’ financial advice.	A large target market. Heavily reliant on support.
New entrepreneurs	Individual could use stability of the service. Ambitious and want to improve/ develop.	They may fail. They could have good financial skills and need other support.	Multiple purchases of services. Could be the next big thing.
Young Families	Need vigilant finance. Provides stability and assurance.	May not benefit from all services offered. Financial disposal to afford service.	Heavily reliant on service.
Elderly looking to retire	Large market. Got the finance to use the service.	Not long term business. Substituted by own knowledge.	Large financial income. Large potential market.

We have chosen to prioritize “Small Business Owners”.

Justification

Due to the client expressing an interest in this segment and the fact that these clients would be most heavily involved our services, utilising all facilities available, we feel small business owners would have the most to gain. Successful small businesses have the potential to be long-term customers, which also makes it the most palpable segment for us to choose.