Segmenting Your Market - An Overview

Written by Robert Silverstein on May 16, 2019

Most of us today are accustomed to receiving advertising from companies that are based on our behaviors in the marketplace. For example, when we search for a product on Amazon, we are offered similar or complementary items based on our previous purchases and searches and our behavior in the marketplace. This is the result of sophisticated database marketing tools that are widely used throughout the e-commerce and traditional retail industries.

Each of us, as consumers, are segmented by many factors including such things as where we live, our age, gender, marital status, family size, household income, and other influences that drive our purchasing behaviors. Marketers break us down into specific groups based on these demographic and psychographic factors, and develop targeted marketing messages uniquely directed at each of us depending on what group or groups we are part of. The capture and use of customer data is the single largest factor that drives successful sales today because it allows sellers to offer consumers products and services that they are more likely to purchase while also offering sales incentives that would be most attractive to members of each group.

Associations, too, have a variety of customers for each of the products they offer, both to their members and to their supplier communities. Most associations today offer the suppliers to their industry or profession the opportunity to purchase such things as advertising in both print and on-line products, exhibit at a trade show, be a corporate member, or a sponsor of an event. Companies purchase one or more of these items to increase their visibility to members while generating sales leads and showing support for their industry’s trade association or professional society.

The industry suppliers that support your association with their marketing dollars each have unique goals, expectations, and motivations for what they purchase from you and why. Some of those may have to do with each company’s own budgets while others may be more about how those industry suppliers perceive your association’s offerings including your membership structure, publications, face-to-face events, sponsorship opportunities, and educational events.

If associations carefully segment their supplier market, they’ll see there is a different type of customer for each product (or combination of products) being sold. The more thorough an organization is at understanding the needs of it supplier community, the better it can meet the demands of its members or industry suppliers, and the stronger and more valuable it’s offerings will become. Keep watch for a detailed elaboration in Segmenting Your Market - A Case Study.