🔑 Why Your Ads Are Not Working! (Small Business Marketing)

Hey, it's Mike Andes. And today is a bit of a different episode.

I'm actually sharing a piece of the MBA for Entrepreneurs online course that I started to create. And so today we're going to be talking about market segmentation. So if that seems scary, don't worry about, we're going to break it down. And it's really the goal of the MBA course is to break down some more complex verbiage and things that you might hear and just make it simple. Today we're talking about market segmentation, which is very important when you start trying to create a marketing campaign or when you start looking at your target market and then trying to create ads that actually relate to that specific segment of the market. So gonna talk about that a little bit today. If you're interested in the course, in the link below there is a presale discount coupon. It's 40% off. I'm gonna be working on this a lot throughout 2021. It's probably gonna take until summer for me to finish the course. We're only about a third of the way through, so feel free to use.

That presale coupon code.

It's just pre sale. Use that on teachable.com you can download the app.

It's super cool.

But without any further delay, let's go ahead and show this five, six minute clip about market segmentation.

Alright, so now we're going to talk about market segmentation. And market segmentation is the process of dividing the total market for a product or service into smaller groups with similar needs. So if we look at market segmentation from the point of hey, this is the total market is everyone that I could service. But now I'm going to segment, I'm going to cut off the chunks of the market that might be similar. I'm going to group them up into specific based on certain variables. Alright, so these folks here might be a certain income class, these folks might be a higher income class. And then we keep getting bigger and bigger, for example, just breaking them up based upon a specific variable. And what we're really trying to do is see how each group would respond positively to a specific marketing strategy. The person in this case inside the total market but is inside of the low income segment, inside the low income market segment, we're gonna have to market to them very differently than the person that's gonna be ultra affluent and have lots of money. They're not gonna be as price sensitive, they're gonna care more about quality or making sure that it is premium service. Or premium product. So the way that you market to the different segments is completely different. And so the reason we need to do market segmentation is fig those different groups that have different types of needs inside of the total market. And how can we penetrate differently to reach them in different manners using our marketing strategies. All right, so for example you might have like here I used income but you could have, for example you might have a product and you have business features and then you have like home or consumer based features. If you're selling cell phones, for example, cell phones for a consumer, a personal use is going to be very different than a business. So how you are going to the business owner is gonna be very different. They're usually gonna have 10, 15, 20, hundreds of lines with many employee accounts and they need speed, it's like paramount. Whereas the home user not gonna need as much data, they're gonna have different requirements, not as perhaps willing to pay higher premiums of prices based for just speed. These are all very different marketing message that are going to be based upon hey, one for a business or an enterprise, one's for personal use. Again those are different market segments. Still part of who we phones too but definitely different needs and we need to market them very differently. Young versus old people, big market segment, tech oriented versus non tech oriented. If I'm selling a cell phone again and I am going after tech oriented people, I'm gonna have a very different type of marketing strategy. Whereas if they have no idea how to hardly turn on their computer, very different marketing strategy in order to sell them a cell phone. Alright, so those are just some examples. But what I wanna talk about right now is really the variables variables of market segmentation. So there's really two main different types of variables that we're gonna talk about and discuss when it comes to market segmentation. The first one is what's called benefit, benefit variables. So this is gonna be things that are related to the customer's needs. So for example, if I'm a gym, there's older folks that are going to be looking for cardiovascular, they're going to be looking for a treadmill, they're going to be looking for different needs that they have, there's a benefit. And them joining the gym is not because we have strength or weights or big dumbbells and weightlifting racks, but that might appeal to a different part of the segment, a different part of the market, A different segment of the market. And that would be young guys for example. So the benefit variable, these are again the variables that would determine these different segments. The number one thing is, what are the customer needs? The older person's gonna be looking for cardiovascular. The young dude is gonna be looking for bodybuilding and weightlifting. And then the girl might be looking for a gymnastics class or yoga, for example. All based upon different needs of the customer. And how we marketed them is gonna be very different. If we're trying to get older clientele in, we're not gonna show them weightlifters and young girls doing backflips in gymnastics, not how we're going to market in that specific campaign. So that's why it's so important to know the benefits that your target market is looking for in your product or service. The second thing that is most common when it comes to market segmentation, and the easiest usually to track is gonna be demographic. Demographic.

So this is really related to the certain characteristics that describe the customer. So the benefits, this is what are the needs of the customer. The demographics are the characteristics that describe the customer. This is going to be like age, marital status, occupation, gender, income. So this would be an example of using a demographic variable to segment the market. This is also going to be like purchasing power, consumption patterns. This is very, very important stuff to know. Are the variables that we're segmenting the population or the total market, are we segmenting it by the benefit that they receive the customer's needs, or are we segmenting it by the demographic, which is what are their characteristics, how much money do they make? Are they married, how many children do they have? This is usually the most common. It's a lot easier to usually quantify. Whereas benefit is usually gonna be a little more malleable because you're looking at things that the customer needs and that many times the secondary characteristic or variable. But we'll talk more about that later on. But right now you need to understand you cannot market this entire total market, the entire market, the same. You need to segment out the different populations and maybe you don't go after all of them. There's gyms that are just for power lifters and just going after that young guy that's looking to body build. There's other gyms that just go for the gymnastics people. There's gyms that go just for cardio and for that older demographic, you don't have to serve the whole population. But realize if you're going to try to go after those populations, you need to look at what they're looking for, their benefit as well as how much money they make. Do they have children? Those are all things that are going to play into how you modify your product or service. In the case of the gym, do you have daycare? What type of equipment do you buy? How big is your gym? These are all things that have to be taken into account when you're looking at the market and who you're trying to serve. When it comes to your marketing plan and strategy.