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Segmentation leading to targeting of customers is arguably the most powerful tool in our marketing bag. (The What is marketing section shows you how segmentation fits into marketing as a whole.)
This page provides guidance on the following:
A segment is a group of people with similar needs who are part of your whole market . For example, you may be trying to get your organisation better known by the general public. But 'general public' is too large and generalised to help you achieve this. So by dividing the whole market into segments of people who you think are particularly important for your organisation you can reach them more effectively.
For example, for an organisation in Halifax their whole market is the people of Halifax. Segments of this market might be:
Normally an organisation has too many segments it would like to reach and 'targeting' is about choosing which ones to prioritise.
The usefulness of segments are that for any one segment, you can:
Some non profit organisations prefer not to make segmentation and targeting decisions but this is dangerous because by trying to meet everyone's needs you can end up with a generalised, low quality activity meeting no-one's needs very well. In particular there are three reasons why you should segment and target. Segmentation and targeting will help you to:
Organisations usually segment their customers using the following categories:
A development NGO working overseas might identify the following segments which prompt choices of which to target:
A membership organisation has to choose:
A regionally based cancer charity reviewing its remit has to decide:
Your strategy will have defined your organisation’s overall objectives. It should also have made clear the broad area in which the organisation is working, for example, deaf people, cancer, steel workers, Methodists, savers, etc.
But even if it has done this, the group you are trying to serve (your market) is nearly always too big for the resources (especially money) you have available. Second, you are likely to serve no-one particularly well without segmenting your market (dividing it up into groups of people with similar needs and wishes) and targeting (prioritising) one or two segments.
Philip Kotler, the academic who brought commercial marketing to the non profit sector, lists six stages of segmentation and targeting:
This is a critical stage and should start far broader than you will be able to address.
Concentrate on numbers in the segment, those that you sense are under-served/under-asked.
That is, how much in need are they? How reachable are they?
Factor together your mission, objectives, segment attractiveness, the number of other organisations operating with that segment etc.
In other words, how do you want this segment to think about you and the benefits you can give them (see section on positioning).
Define the product’s (goods, service or idea) attributes in a way which fulfils your organisational objectives and satisfies the customer's needs.
Kotler P, and Fox K, 1986, Strategic Marketing for Educational Institutions, Prentice Hall: Englewood Cliffs, NJ.
Do you agree that audience segmetation results in better reach and ability to meet needs? Why is it, do you think, that non profits tend to give segmentation and targeting a miss? Don't the results justify the spend?
Have your say on the marketing and branding forum.
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