Considerations for Market Segmentation
Many segmentations are focused on value, rather than functionality and company size. In these plans, companies focus on perceived benefits which underlie the target segment’s purchasing considerations.
In low-involvement product offerings, companies often consider researching usage behavior, buyer behavior, price elasticity / sensitivity and brand loyalty, among others. For high and medium involvement products, businesses often consider researching their customers’ comprehensive needs, buyer types, business’ buying behavior and core values, among many others. Lifetime Customer Value as a metric provides a measurement of the customer’s total worth which can help companies concentrate on improving profitability. Indeed, the variables for segmentation will vary by objective, company and industry.