What is the best way to develop and implement a segmentation and targeting plan?

1 Define your objectives

Before you start segmenting and targeting your customers, you need to have a clear idea of what you want to achieve. What are your marketing goals and how do they align with your business objectives? How will you measure your success and track your progress? Having a specific, measurable, achievable, relevant, and time-bound (SMART) framework can help you define your objectives and guide your segmentation and targeting plan.

2 Identify your segments

Segmentation is the process of dividing your customers into groups based on their characteristics, behaviors, needs, preferences, or other criteria. There are different types of segmentation, such as demographic, geographic, psychographic, behavioral, or attitudinal. The type of segmentation you choose depends on your objectives, data availability, and market situation. You can use various methods and tools to identify your segments, such as surveys, interviews, focus groups, web analytics, customer relationship management (CRM) systems, or cluster analysis.

3 Evaluate your segments

Not all segments are equally valuable or attractive for your business. You need to evaluate your segments based on their size, growth potential, profitability, accessibility, and compatibility with your offerings and positioning. You can use criteria such as market attractiveness, competitive advantage, strategic fit, or return on investment (ROI) to assess your segments and rank them according to your priorities.

4 Select your target segments

Targeting is the process of choosing which segments you want to focus on and serve with your marketing mix. You can use different targeting strategies, such as undifferentiated, differentiated, concentrated, or customized. The strategy you choose depends on your objectives, resources, capabilities, and competitive environment. You should select your target segments based on their fit with your value proposition and your ability to deliver superior value to them.

5 Develop your positioning

Positioning is the process of creating a distinctive image and identity for your products or services in the minds of your target segments. It involves communicating how your offerings are different from and better than your competitors' and how they can satisfy your customers' needs and wants. You can use various techniques to develop your positioning, such as perceptual mapping, positioning statement, or positioning matrix.

6 Implement and monitor your plan

Once you have developed your segmentation and targeting plan, you need to implement it and monitor its performance. You should align your marketing mix elements, such as product, price, place, and promotion, with your target segments and positioning. You should also collect and analyze data on your key performance indicators (KPIs), such as market share, customer satisfaction, loyalty, retention, or conversion. You should use feedback and insights to evaluate and improve your plan as needed.