What is Market Segmentation?

Marketers use a wide variety of tools to come up with a marketing stratgey for the organization. The types of products available and introduced, the advertisements, distribution channels and customer touch points are all part of the game. However, a major area where companies fail to recognize is the different needs of the customers.

Categorizing similar needs of customers into clusters is called segmenting the market. The segments can be broken down in terms of customer income, unique needs, geographical conditions, social statuses, education, religion, ethnicity and the list goes on.

There are no rules set in stone to segment a market. As long as you are able to cluster a group of people with similar needs and wants, it can be called a market segment. Once you have segmented the market, the business can cater to each segement based on their unique needs.

Some popular market segments are as follows:

1) Geographic Segmentation

This is a scenario where the market is divided based on the geographical location of the customers. Global marketing heavily relies on this segmentation as they consider one nation to be a unique market. However, it is not mandatory to assume that one nation is one unique market. For an example; although India and Sri Lanka can be considered as very unique markets even though they are situated in close proximity, Denmark and Norway could be clustered together. But depending on the sensitivity of the product to cultural factors these segmentations could change.

2) Demographic Segmentation

This segmentation focuses on factors such as age, gender, education level, income level, religion, ethnicity etc. Age group is a popular segmentation method, for an example, in the confectionary, toys and education businesses. Gender plays a major role in the fashion industry. For an example if a business is looking at opening a clothing store in a city, it should conducted a census and find out the percentage of men and women in the area so it can better cater to the target market.

Likewise, a market can be segmented to any number of manageable sectors and then a business can better focus on one segment.

Depending on the needs of the segments a business can;
- provide one product to the entire market,
- provide one product to several like-minded segments, or
- provide a unique product to all segements of the market.

Importance of Market Segmentation

- better identify the unique and varying needs of a market
- can better cater to the unique needs of the market
- personalized products give more value to customers, hence more customer satisfaction
- easier to handle a smaller segment than handling the entire market
- chances of a product failing in a segment is less
- can focus the business's marketing more effectively to a segment

If you have further questions regarding market segmentation please comment them below.

What is DMAIC and It's Uses

DMAIC is a popular model used for problem solving in organizations. This tool has been adopted by many Kaizen gurus due to the methodical approach used in DMAIC tool. This is also a prominent tool used in Six Sigma processes.

This tool can be used to identify problems within the organization and resolve them in a systematic manner.

In Kaizen, DMAIC tool is used a lot since it can deliver change in a standardized manner. And DMAIC can be used in a cyclical manner for problem solving and improvement, which is a core concept of Kaizen.

What does DMAIC stand for?

1. Define
2. Measure
3. Analyse
4. Improve
5. Control

Define

First step of this process is to identify the problem that you need to tackle. This is called 'defining' your problem. There is no strict guidelines as to how this can be done. You can write a few sentences about the problem at hand and the current situation of it.

Measure

The second step of the DMAIC process is to quantify your problem. By this way, you always have supporting evidence to backup your problem statement as well as objectives of your DMAIC project.

Also measuring helps you evaluate the before and after results so you can identify if your DMAIC project was fruitful.

Measuring criteria largely depends on the issue you are tackling. For an example: if you are trying to identify the reasons for loss of productivity in a production line, you could probably start by measuring the times taken by each activity and determine the lagging indicators.

It is important to know that measuring doesn't necessarily mean collecting numbers. It could be any type of qualitative data too.

Analyse

Analyse essentially has to do with crunching the numbers you gathered before. Do not mistake that it is just numbers that you can analyse. You can analyse qualitative data too.

Analyse step should be used to derrive at a plausible solution to your problem. Since your problem and solution is backed by extensive data and numbers, there is little chance that your solution will fail.

Improve

The fourth step of the DMAIC model is to implement your solution that is going to improve the current context of the problem. Notice the word "improve" being used as opposed to "solving." This is to mean that DMAIC model should be used to provide an improvement over the current problem. The solution that you derive might not eliminate the problem. Instead DMAIC focuses on continuously improving from the current status to a better status. This is why DMAIC is also identified as a cyclical process.

Control

The final step of DMAIC model is to ensure that the achieved improvement is sustained. For this you can implement one or more control mechanisms or points. These control points will ensure that the process does not slide back to its original status.

After one cycle of DMAIC is completed you can start working on your next project starting from the achieved and sustained improvement. So any shortcomings that were overlooked in the first cycle can be improved in the second cycle. Likewise, DMAIC can be used in turns to achieve the optimum result for any problem at work place.