The Importance Of Market Segmentation For Businesses
Businesses have to diversify their products to address the challenges hindering growth and development. Sometimes, the market target keeps on shrinking marking the end of an era and a beginning of another. Companies have to develop ways of remaining competitive in the market by identifying strategies of increasing market share or a change in the market segment. Universities are amongst the organizations that have to continuously expand their market segments to keep growing and remain competitive. Future changes in a given market segment could have significant implications on the performance of an organization necessitating the need to implement proactive approaches when faced with such threats.
A review of a regional state university reveals that offering services that suit the needs of four new market segments such as top organizational leaders, online, home, and part-time learners can help solve the challenge it is currently facing ― the shrinking market of high school leavers. Market segmentation entails the process of subdividing the market into different sections and groups of potential customers based a certain criterion. These groups tend to have similar characteristics and demonstrate more than one common element amongst themselves (Weinstein, 2013). Segmenting a market divides a group by a set basis that may include gender, age, and psychographic factors, such as values, interest, and attitudes among others. While considering a market segment, it is critical to focus on the overall composition of the target market. Sandy, Gosling, and Durant (2013) classify market segments based on four factors that include the geographic, demographic, psychographic, and behavioral.
The geographic component consists of the location, region, and climate that affect the business. The demographic factor constitutes the occupation, income, gender, education, age, and size of the household. The psychographic element comprises the values, lifestyles, attitudes, and interests of the market segment. The behavioral factors consider the relationship between the product and service offered in matching the behavioral component of the client. In such a way, the purpose of evaluating a segment based on these factors is to provide a broad overview of the target customers, composition, needs, and importance of choosing a group of clients over the rest.
Segment One: Part-time Students
Part-time learners are busy people who require to attend classes during their free time. The numbers of this group of people have continued to grow, especially with the increase in the requirements for higher educational levels for better opportunities in different fields of work. They are the people who want to advance their education levels despite their demanding jobs, family, and lifestyle among other elements. They include people in the informal and formal employment sector, business people, and professionals in different fields (Blackwell & Pinder, 2014). For these learners, a flexible education program is key, and most prefer evening classes to daytime. They also seek online learning platforms with less classroom mode of education.
Overall, the needs of this segment converge around a flexible style of learning. GeographicThe regional state university has to set up branches in most parts of the country to make it accessible for many learners. In addition to increasing their presence in the country, it is vital to take advantage of online learning given its growing popularity (Moore & Kearsley, 2011). Creating flexible learning timetables would be critical in meeting the needs of this population.
Demographic
The non-traditional learners include people of all ages above the high school age bracket. In such a way, income levels can differentiate this group; a high gap between senior workers and the unemployed is attainable. In such a way, in addition to a flexible learning model, the fees charged should be carefully set.
Psychographic
Feeling educated, resourceful, and happy is a desire of most people. A conducive learning environment should be a significant consideration for the university alongside ensuring quality learning outcomes. Since most people seeking education in this category have the motive of getting better work opportunities, complementary packages, such as internship and job placement programs can increase the attractiveness of the program (Janks, 2014). Furthermore, matching the skills attained with the requirements of the students should be carefully planned.
Behavioral
The non-traditional learners have different behavioral drivers, such as attitudes, motivation, and interests. They decide the institution that they can attend and appropriate programs they can use to further education and achieve their goals. The university should offer programs that align with the behavioral drivers of the non-traditional students. In such a way, it is vital to engage them in the formulation of the learning programs.
Criteria for Segmentation
The features of the market segment need to be measurable such that it is possible to compare various aspects of different parts. According to Eweda (2016), they include purchasing power, profile, and size. Given the varying demands of this population, data regarding them can be collected via primary studies to substantiate their statistics. Additionally, educational institutions databases can, to some degree, provide data on this market segment.
Accessible
The market segment needs to be adequately informed about the available service or product to influence sales. Various forms of advertising, such as television, newspapers, social media, and radios could help access this population.
Substantial
The market segment needs to be large for profitability and sustainability of the business. A substantial market should provide the largest homogenous group that is worth investing using a well-developed marketing program (Eweda, 2016). The targeted segment is large and capturing it would help spearhead the growth of the regional state university. A focus on the market that consists of average income customers can increase the profitability of the institution.
Differentiable
A market segment has to be distinguishable from the rest of the groups such that a business can tailor for it a suitable marketing mix. Part-time learners are distinguishable from high school leavers and have interacting needs implying that by focusing on them, the university can be successful.
Actionable
The organization should be able to provide the product to the customers who should have the capacity to purchase. A practical target segment allows the business to design programs that would help attract and serve customers. Hence, if the part-time students need advancing their education and the regional state university has the capacity of fulfilling these needs, then the market segment is actionable.
Reasons for Possibly Selecting This Segment
There are many educational institutions within the region offering similar services. It is challenging for a startup business to succeed in a highly competitive environment unless it applies strategies that provide a competitive advantage. However, few operators have managed to customize the service to the specifications of this group, a niche that the regional state university can capitalize and achieve success. Thus, the university needs to hire a team of experts who would help develop strategies to attract customers.
Growth Potential
The potential of the growth of the segment in the next few decades is promising due to the rising population globally. Education is becoming more accessible and attractive as the key to success. As people's lives continue becoming busy, the segment of part-time learners will continue to grow increasing the demand for the university services.
Availability of Resources
The regional state university can acquire support from the government to pursue the course. It will require massive resources to meet the differentiated needs of the part-time students. It needs to have alternative sources of funding to develop the many programs that match the different needs of the segment while seeking to maintain reasonable charges to increase the affordability of the service as well as attract more consumers.
Segment Two: Top Managers or Leaders in Organizations
Top managers in organizations have continued to seek for platforms to advance their education but face the challenge of the lack of facilities and programs that suit their stature. This segment includes chief managers, CEOs, and directors of organizations. To this segment, further education is essential as a means of offering effective leadership, updating on current affairs, and advancing personal knowledge as well as an influence to the junior employees. This group has unique demands revolving around executive and convenient services.
Geographic
The regional state university should consider providing education services for this particular class of customers. Executive lecture halls for this group should be designed to suit their stature. Enhancing the university's online presence is essential, and developing dynamic websites and portals can compliment the accessibility of the university. The university offices need to include a student service desk catering for the needs of this group only.
Demographic
The university should offer diverse learning programs that would meet the specific needs of the senior organizational managers. Carefully designed learning programs that suit the requirements of this segment, such as teaching on request and mobile tutors should be rolled out.
Furthermore, allowing the learners to design the course outline would be another useful strategy to ensure the university serves the specific needs of these customers.
Psychographic
The regional state university may tailor its programs to meet the needs, interests, and expectations of the senior adults. Differentiating the curriculum per industry in which the manager works would enhance the effectiveness of the program in meeting the diverse needs. However, it is crucial that the university also allows for interaction sections between the different learners from the various industries to meet and exchange ideas on request or as one of the packages.
Behavioral
The regional state university must demonstrate high levels of professionalism in dealing with this segment. Professionals are critical on embracing values, attitudes, and behaviors that would improve their satisfaction, knowledge, and skills. Additionally, the university should allow the top leaders to choose the manner in which they would like to learn given their nature of wanting to take charge. High levels of flexibility should be embraced such as change of venues and time of lessons on request.
Criteria for Segmentation
It is easy to measure the segment by considering the number of top managers in organizations in the region. However, primary research is vital to understand the specifics of this segment such mode of learning among other factors.
Substantial
A substantial market segment is homogenous and has adequate size to drive profitable revenues to the business. Moreover, the going concern assumption of organizations provides more assurance of the need to focus on this segment. Although the number of top leaders in organizations in the state might be low, offering services to them has a significant impact on the organization. It could boost the image of the university and attract learners in the other segments to the institution. DifferentiableIt is critical that a business can differentiate one segment from the rest. Sometimes, different parts have similar features, but it is worth isolating them for marketing. The senior organizational leaders can be set apart from the rest by offering programs that are more focused on addressing their specific needs.
Accessible
The ability to access a market is related to its awareness. Advertising is a reliable way of reaching out to the target segment, mainly when an organization uses the appropriate medium. Advertising platforms, such as newspapers, television, and magazines can be useful in accessing senior organizational leaders. However, the most productive marketing approach would be the use of personal selling (Washburn & Bibb, 2017). Thus, combing these two forums would help Regional State University to reach this target market effectively.
Actionable
This criterion is amongst the core factors to consider in the evaluation of a market segment. The institution must identify the opportunity; top organizational leaders need to further their education. The university should have the capacity to effectively offer its products to the market segment while the customers should demonstrate the ability to purchase the products. As such, the institution will develop an action plan on meeting the demand of the target segment.
Reasons for Choosing this Segment
The Large Size and High Potential for Growth
The corporate governance has continued to grow with the advancement of economies and leadership approaches. Companies continue investing in education for its staff to effectively undertake organizational duties and responsibilities (Onorato, 2013). This segment has an opportunity for future growth as the majority of the companies seek to expand and become more successful.
Competition
Although many educational institutions are offering different educational packages, few to none offer customized learning for top organizational leaders. The regional state university has an opportunity of succeeding if it carefully rolls out this program. However, it might face competition regarding pricing as new players enter the market, but as a market leader, it might enjoy a sufficient competitive advantage.
Company Resources and Value
The regional state university has to effectively use its resources to cater for the needs of this category of learners. It is imperative that the organization invests more in developing a flexible education program to continue attracting more students in this category. It should seek to strengthen its core values with a strategic focus in integrity, honesty, and professionalism, which are of significant concern to this target market.
Segment Three: Home Teaching
This is the group of learners who want to study from home. It might include learners of all ages who dislike going to school. It might compose lactating mothers, homemakers, and people with special needs.
Geographic
The regional state university should consider providing education services for this particular class of customers by taking education tutors at their doorsteps. Complementing their online presence by enhancing their usability can significantly increase their reach of this group.
Demographic
This group consists of a highly differentiated range of customers requiring the university to consider each client individually.
Psychographic
For this group, the lifestyles and preferences of this group like flexibility should influence the design of the services to meet its needs. Those customers with physical and mental challenges will require a differentiated approach in meeting their needs.
Behavioral
The university should consider the values, culture, and mode of communication preferred by this group. Instilling patience and adaptability in the tutors will help in capturing this segment.
Criteria for Segmentation
The measure of this segment is researching to establish the number of people willing to study at home in a given semester. SubstantialThe number of people willing to study is high especially considering lactating mothers and people with disabilities.
Differentiable
This market segment is easily differentiable from the traditional learners as people preferring to study from home.
Accessible
This group is highly accessible via different modes of advertisement. Television and social media adverts are key instruments of reaching this segment. Additionally, another marketing approach would be the use of personal selling (Washburn & Bibb, 2017).
Actionable
The need for education platforms for this group of customers is immense. An actionable plan to solve the barriers this segment faces in advancing their education, such as parental responsibilities and disability, is an important aspect in capturing this market.
Although the need for education by this group is justifiable, effectively rolling out an educational curriculum is a challenge given the diverse needs.
Segment Four: Online Tutoring Market
This is the group of learners who want to study from online exclusively. It might include learners of all ages with adequate internet access.
Geographic
The regional state university should consider providing internet access hotspots in different locations to reach this clientele group.
Demographic
This group consists of customers of all ages making it easy to crowd-educate. In such a way, the quality service to each portion of this segment should guide the design of the curriculum.
Psychographic
The lifestyles and preferences of this group should guide the design of the services. Hence, differentiating the needs of the customers preferring live tutoring from those requiring offline training is vital.
Behavioral
The university should consider internet use behaviors of this group: the most frequent time of being online, gadgets used to access the internet, and browsers among other factors to design the service.
Criteria for Segmentation
For this segment, online research is important to establish the number of people willing to study online. Additionally, existing educational records on online students can provide data on this group.
Substantial
The number of students preferring online learning to brick and motor classrooms has continued to rise. The university has the potential of capturing a high number of students by pursuing this approach.
Differentiable
The university can easily differentiate this group as the mode of service is exclusively online.
Accessible
The online learners are highly accessible via different modes of advertisement. Internet and social media adverts are efficient instruments of reaching this segment. In addition, television and newspaper marketing can enhance their reachability (Washburn & Bibb, 2017).
Actionable
The need for online training has continued with the rise in the use of the internet. Creating a curriculum executable via online platforms can help the university capture this segment.
Stiff competitionInstitutions offering online education continue increasing with the advancement in online based technologies. The regional state university has a limited chance of capturing a substantial portion of this market, making this segment a less viable investment.
Conclusion
The regional state university can address the challenge it is facing regarding a shrinking trend in its target segment; high school students, by focusing on four other market segments of learners; part-time, online, home, and top managers in organizations. To suit the needs of these segments, it is vital that the organization customizes its services with a focus on customer satisfaction. An aggressive marketing approach should be adopted to increase accessibility to the potential customers to boost the effectiveness of its performance. Additionally, the university should consider customer participation in the design of the learning programs to enhance their acceptability as well as efficiency in imparting knowledge. Hence, continued creativity and collaboration are necessary to ensure the operations of Regional State University remain sustainable.
