The most popular concept of marketing is indeed the marketing mix or marketing mix, but that leaves a problem. The marketing mix does not tell, which products are easily accepted by the market and those that are not, which locations are close to markets that are thirsty for your product and which are not, which products and locations are tightly competitive and which are not. That question does not need to be raised when business competition is not tight. But when competition suppresses the business situation, that’s an important question to answer.
To answer that problem, segmentation and targeting of the market will help. Segmentation is work at the strategy level, or finding easy ways in marketing practices in the midst of competition and various tastes, while the marketing mix is work at the level of tactics.
According to Cano and Schwatzkopt, the concept of market segmentation and positioning has been inherent in marketing practices since 1920, but no one has expressed it in writing. It was only in 1969, Al Ries and Jack Trout compiled the brand positioning in the article Industrial Marketing. Segmentation itself is inherent in the formulation of positioning.
Segmentation is dividing the market into smaller groups. The division is generally based on geographic location, demographic characteristics, psychography and behavior. It can also be based on consumer groups or businesses that need raw materials. Why do division or grouping? The population in a location is not the same as their needs, interests and requests. But also not at all different from each other. Differences in needs and interests can be classified in the form of market segments or smaller groups that have similar needs, interests and requests.
Segmentation helps to choose market segments. After classifying the market into segments, marketers evaluate, which segment is most suitable for their business. Most suitable means that marketers are able to serve them, able to compete with other businesses,
Although marketing is often identified with the marketing mix, segmentation and target setting provide the following benefits.
• Segmentation and targeting will make the work of the marketing mix more focused and efficient or low-cost. By determining specific market segment targets, Imagine marketers rely solely on the marketing mix in their marketing programs. He will have difficulty determining the exact location and where the right communication channel is. Marketing costs are very large because the choice of prospects is very large.
• Determination of target markets helps marketers gain competitive advantage. If some rice marketers compete in the same market based on geography, competition will be tight, competition will be superior in quality, price and location. By understanding segmentation, new marketers can avoid intense competition. If there is one marketer who is segmenting and determining specific target markets for their services, for example a group of organic rice enthusiasts, then he provides organic rice, then he has a competitive advantage. For organic rice enthusiasts, organic rice is preferred to general rice. Price is not a consideration.
• Segmentation and targeting of markets helps find the best market segments / groups. Like entering a buffet dining room that provides a lot of choices, to get the best choice, before taking food you should see all the available menus. After that, it determines which menu is the best. The best menu is a food menu that does not interfere with their health and also according to their tastes. Segmentation is like observing all the available menus, so from that information, marketers can decide which market segments are most in need and like the products offered. Besides thinking like that, segmentation can also find which segments have high purchasing power and what they need. Where are the segments that marketers are able to compete.
• Reaching a market segment, for example the geography segment, requires different costs between one segment and another. The difference in costs can be promotional costs and shipping costs.