Tapping Potential Market Segments with Target Market Segmentation Engagement – Infiniti Research
About the Client
The client is a leading, independent wholesaler serving pharmacies throughout the Western United States, Middle East, Asia, Australia, Africa, and South America. With a workforce of 600+, the company is now looking to expand access worldwide.
The Business Challenge
With the rising technological advancements, the way customers behave and consume is changing dramatically, making the management of customer experience more complex in the pharmaceutical industry. In this changing context, the client – a renowned company in the pharmaceutical industry understood that having a better product is no longer enough to keep ahead of the competition. Thus, the pharmaceutical industry client wanted to reinvent the way they engage with their customers. Moreover, by analyzing the various customer groups, and their level of satisfaction from existing offerings, the pharmaceutical industry client was looking out to make necessary adjustments in the marketing initiatives for better customer experience and company’s growth.
Top Challenges Faced by the Pharmaceutical Company
Problem Statement 1
The pharmaceutical industry client realized that, targeting potential customer individually resulted in revenue losses for the company. Thus, with the help of Infiniti’s target market segmentation process, the pharmaceutical industry client wanted to effectively group similar consumers together to target specific audiences in a cost-effective manner with different segmentation processes.
Problem Statement 2
By analyzing the various customer groups and their level of satisfaction from the existing offerings, the pharmaceutical industry client wanted to identify new market opportunities and launch products to meet their target customers’ requirement to reduce customer churn rate.
Problem Statement 3
With the market segmentation process, the pharmaceutical industry client was facing difficulties to analyze cost, which subsequently resulted in revenue losses for the compeny. Thus they wanted to identify the right prices to target new customers in the market and needed to fix prices for their products and services accordingly.
Problem Statement 4
With Infiniti’s target market segmentation process, the pharmaceutical industry client wanted to explore and analyze the characteristics of potential customers and sell products and services in an agile and efficient manner, to improve the profit margin.
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Solutions Offered and Value Delivered
To help the pharmaceutical industry firm tackle the key challenges in the pharmaceutical market, our experts developed a robust market segmentation process. The target market segmentation process followed segmenting customers based on these phases:
Phase 1: Behavioral Segmentation
The initial phase of the target market segmentation process followed behavioral segmentation process. The customers were segmented into various categories with respect to how their behavioral and consumption patterns elements such as lifestyle, buying patterns, brand loyalty, usage patterns, and even how consumers spend their time and money were taken into account when performing the behavioral segmentation process in the pharmaceutical industry.
Phase 2: Demographic Segmentation
The second phase of segmentation in the pharmaceutical industry was on the basis of their socioeconomic characteristics including age, gender, level of education, income, occupation, religion, marital status, and average family size.
Phase 3: Psychographic Segmentation
The third phase of the market segmentation process was classifying the customers based on their interests and activities in the pharmaceutical industry.
Phase 4: Geographical Segmentation
The final stage of the market segmentation strategy involved collecting and evaluating data based on the geographical location of the consumer.
By grouping customers into different subsets based on behavioral, demographic, psychographic, and geographic segmentation, the pharmaceutical industry client was able to gain a competitive advantage in the market by launching products and services to meet the requirements of customers. The target market segmentation process also helped the pharmaceutical industry company to identify the customer’s needs and evaluate the gaps, which further helped the pharmaceutical industry client to better serve the target audience. Moreover, with Infiniti’s target market segmentation process, the pharmaceutical industry client was able to make necessary adjustments in their marketing initiative, which further resulted in improved profit margin.
Moreover, target market segmentation process also helped the pharmaceutical industry player to identify the right prices to target new customers in various markets and moreover helped the pharmaceutical industry client in fixing prices for their products and services accordingly. This subsequently helped the pharmaceutical industry firm to ensure that their offerings are neither overpriced or underpriced.
Also, Infiniti’s market segmentation process helped the pharmaceutical industry client to:
- Focus on key customer segments to bolster growth and profitability
- Focus on their high-profit segments such as product development, resource allocation, and marketing efforts, which subsequently increased the number of new customers
- Identify new and profitable market segments for products and service offerings
- Identify and comprehend the customers’ demands through effective market segmentation strategy.
Adopting market segmentation processes are vital for the economic well-being of a company. An effective market segmentation strategy must be established in the company in order to streamline activities. Wonder where to start? Request a FREE proposal below
Importance of Market Segmentation Process in the Pharmaceutical Industry
Target market segmentation in the pharmaceutical industry is the process of dividing consumers based on their purchasing behavior, characteristics, segments, response to promotions and advertisements, and more. Target market segmentation process enables companies in the pharmaceutical industry to tailor marketing strategies to meet the needs of particular segments. Target market segmentation process also helps companies in the pharmaceutical industry to identify consumer needs and preferences, areas of declining demand, and new marketing opportunities. One of the main advantages of target market segmentation process for businesses is that it helps to obtain a competitive advantage in the market by analyzing various customer groups and targeting specific products to meet their demands. The process also simplifies things for the business by delivering them clarity on different customer segments and understanding what they expect. Other benefits of target market segmentation process include:
Helps determine market opportunities: Businesses can reap the benefits of target market segmentation process by analyzing the various groups of customers and their level of satisfaction from the existing offerings. Wherever gaps of dissatisfaction are observed, companies in the pharmaceutical industry can use this as an opportunity to improve and launch products to meet the requirements of this segment.
More Efficient: Target market segmentation process allows your companies in the pharmaceutical industry to target relevant segments instead of targeting each individual separately. The effective segmentation strategy also allows companies in the pharmaceutical industry to group together similar customers and launch marketing campaigns designed for each group. By targeting groups of consumers rather than individuals, companies in the pharmaceutical industry can use their time and money more efficiently.
Tailor marketing initiatives: With the help of the market segmentation process, companies in the pharmaceutical industry can understand the varied mindsets of their customers. This helps firms in the pharmaceutical industry to make significant adjustments in their marketing initiative targeted at different groups of customers.
Determining product pricing: It is essential for companies to adopt different product pricing for different markets, considering the price sensitivity of the customers in each market. Companies in the pharmaceutical industry can use market segmentation process to identify the right prices to target new customers in various markets and fix prices for their products and services accordingly.
Product development and design: It helps pharmaceutical industry firms to get into the minds of their customers and understand their real expectations from the brand. Companies in the pharmaceutical industry can use market segmentation process to identify what is working well for them and what is not in terms of their offerings to the customers.
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Types of Market Segmentation Process
There are several ways a market can be segmented. Different ways of grouping the market will make more sense depending on the brand, industry, and the customer information available.
Geographic segmentation: This type of market segmentation process is one of the most common types, where organizations segment the market by focusing on many geographic areas. Also, consumer preferences differ from region to region. So, it is significant for companies to choose that geographic segment that best aligns with their goals.
Psychographic segmentation: This is a strategy that considers the lifestyle of people, interests, their activities, as well as opinions to describe a market segment. Such types of market segmentation take into account the psychographic aspects of the consumer’s buying behavior. They also reflect the psychological features of consumer buying.
Demographic segmentation: This is one of the most widely used and simplest types of the market segmentation process. In this type of market segmentation process, the population is divided based on variables such as gender, age, nationality, income, and occupation. The demographic segmentation variables help divide a huge population into precise customer groups.
Benefit segmentation: Dividing the market based on the perceived value, benefits or advantages that customers see in your brand, service or product. It is possible to create different groups based on quality, performance, special features, or customer service.
Behavioral segmentation: In this strategy, customers are grouped based on behavior, usage, and decision-making patterns. The products are marketed to target customers based on their behavioral patterns that define their likelihood to buy or not buy a particular product.
Why partner with Infiniti Research?
Established in 2003, Infiniti Research is a leading market intelligence firm providing smart solutions to address your business challenges. With 15+ years of expertise, Infiniti Research has been instrumental in presenting a complete range of competitive intelligence, strategy, and research services for over 550 businesses across the globe.
Are you looking to create a new market segmentation strategy? We’d love to help! Contact us today!