joint venture marketing
When you and a partner come together to form a joint venture, you will want to make the most of the advertising tools available to both companies to bring a larger customer share to your businesses. Marketing is most effective when the audience is pinpointed prior to the development of strategies. This article will explain the concept of market segmentation as related to joint ventures, as well as give you ideas on how to use market segmentation to your fullest advantage.
What is Market Segmentation?
Market segmentation breaks your target market down into smaller subsets that make it easier to direct your marketing strategies to a very precise demographic. The common features of any market segment include:
- A distinction from the other segments within the target market
- A similarity that puts all market segments under a similar umbrella
- It can be reached through strategic marketing efforts
- It will respond to the right marketing stimulus
A variety of demographics may be used to identify these various market segments, including:
- Income level
In some cases, customers will fall into more than one segment, such as young people who all live in the Midwest and are considered to be in the lower to middle-income range. Marketing strategies that appeal to a particular segment will address these similarities effectively by targeting different subgroups with different advertising campaigns.
Benefits of Market Segmentation
There are many reasons to create market segments before choosing a marketing strategy. These benefits might include:
- The ability to discover other uses or benefits for products by studying different market segments
- The ability to match specific products and services to a specific target market for advertising purposes
- Learning to build customer loyalty much more precisely by focusing on very specific customer groups at one time
- Value from the marketing dollar by directing the advertising message to the specific group that is most likely to purchase your product or service
In joint ventures, market segmentation helps you determine which companies will be the best fit for a JV partner. When you break a target market into subgroups, you can discover which companies most closely mirror yours in terms of customer base, without directly competing for sales.
How to Identify Market Segments
Correctly identifying market segments requires in-depth customer research that helps you get to know your customer base on a whole new level. Customer surveys, focus groups and sales tracking are all ways to become more familiar with your customers’ needs and spending habits.
Some small business owners will choose to conduct their own market research, using DIY surveys and taking the time to talk to customers when they come into the business. Others will hire outside consultants that specialize in market research, to get more accurate information for a fee.
Identifying your target market, and breaking that group down into segments, is the first step in creating a successful marketing strategy for your joint venture. When you better understand the needs and habits of your target market, both businesses will succeed in building their customer base and boosting their profits.
christian fea is CEO of Synertegic, Inc. A joint venture marketing firm. He exemplifies how to profit from Joint Venture relationships by creating profit centers with minimal risk and maximum profitability.
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