Microsegmentation- Slicing the Market into Nano Parts

Published by MBA Skool Team, Published on June 12, 2013

The whole idea behind marketing is so ensure that the product and service made by a company reaches its prospective customers and solves some customer need. Due to this, the very basic concept of understanding the market is segmentation, targeting and positioning. Targeting a certain group of people depending upon certain demographics and parameters helps in focus and channelized marketing. Positioning is how a company wants its products and services to be perceived. However, before selecting a target group, it is essential to slice the market in certain segments, and this process is known as segmentation in marketing.

Segmentation is the primary process in marketing where the company decides on certain parameters and slices the market on what could be the best way to target people with their products and services. The basic segmentation involves parameters like demographics, age, gender, income, spending power, place etc. However, with more technology and large scale presence of information gathered from internet, another field which is making its importance in marketing is micro segmentation.

The internet and growing information technology has given companies oceans of data as each and every click and signal of a user can be tapped. This tremendous source of information can be utilized by companies is working out best possible parameters and can help create smaller segments or micro segments, which can then be used for customized services and pin-point accurate offerings as per the customer needs.

In the cyber world, each website has a large number of visitors, and each and every visit is recorded by the owners of website. Data like pages visited, frequency of visit, time spent on a particular section, most popular sections, least popular sections, returning visitors, location of user etc are easily tapped by companies. This gives them an opportunity to convert this information into understanding the customer behavior and their preferences. Thus, this data if properly studied, analyzed and interpreted, can give a huge opportunity to companies in offering customized services, which would help in customer retention and enhancing brand loyalty.

Companies can therefore work on increasing the popular services, improve or decrease the unpopular section, think of ways of maximizing utility, increase retention time and increase user involvement in their services. Micro segmentation thus is a process of slicing the market using the large amount of digital data which is gathered after tapping in the user information

Another important sector where micro-segmentation is increasing as a part of analyzing customer behavior and segmenting the market is the telecom industry. With many players competing in the mobile operator service sector, acquiring customers is difficult. Also, with mobile number portability (MNP) brand switching has added to the woes of the companies, as customer retention has become difficult. But micro segmentation helps in customer behavior with the huge amount of digital data accumulated by analyzing and interpreting the customer usage.

In the telecom sector, data like call records, call durations, amount of prepaid recharges, frequency of calls, frequency of top-ups, sms utilization, local; national or international call etc is obtained and accessed by the companies. This data can then be analyzed and studied to understand a particular pattern to study the customer behavior. This gives the company to create and prepare customized services for a very small niche set of users, and helps them giving a unique service to small group of customers. This would not only increase the number of services provided but would also help in retaining the customers, as their special needs are being taken care of.

With more penetration of technology in the field of business, companies have to maximize the usage of all oceans of data available and fine tune their products and services as per the customer requirements. And once such process of slicing the market into smaller modules, which helps in segmenting the population for better niche services is known as micro segmentation.

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