Overview

Successful marketers break down markets into sub-groupings by reference to the different needs and characteristics of customers. This process is essential to producing targeted effective promotion rather than a machine-gun approach which is not only costly but ineffective.

In the previous chapters we have shown how you investigate the environment and your marketplace. You now need to use this information to define customer groupings. These are collections of people who are your target markets. If you are at the conception stage, where you have no previous sales history information to analyse, you may need to conduct further research to identify your target audiences. In this case, we recommend that you return to Chapter 3 to investigate this further.

The main objective of this chapter is to give the marketer an understanding of the process of segmentation and assess the business opportunity the Internet provides as a method of reaching and communicating with identified segments. The chapter is broken into four sections What is segmentation? Channel choice will the Internet reach your target market segment? How the Internet can help identify market segments. How to decide whether to invest in online marketing.

What is segmentation?

Segmentation, or target marketing approach to business operations, centres around the recognition that different customers require different things from what may seem like the same products. For example, some people may buy bread on price and convenience (long-lasting, cheap, sliced bread). Others may only want bread that is healthy , and others want bread...