Market Segmentation | How Gymshark use Market Segmentation Explained.

Summary

This video script delves into market segmentation, a pivotal business strategy exemplified by Gymshark. It elucidates how businesses categorize customers into segments based on demographics, behavior, and lifestyle to tailor products and marketing. The script underscores Gymshark's strategic focus on the 18-25 age group, emphasizing fitness and fashion, leveraging influencer marketing to resonate with its audience. The narrative also addresses the benefits of market segmentation, such as enhanced customer satisfaction and brand loyalty, against potential drawbacks like increased costs and product diversification challenges.

Takeaways

• 🔍 Market segmentation allows businesses to identify and understand their target audience's specific needs and wants.
• 🌐 Geographical segmentation involves tailoring products and marketing strategies based on the location of the target market.
• 👥 Demographic segmentation focuses on characteristics like age, gender, and income to target products effectively.
• 🏋️‍♂️ Gymshark targets a young demographic, primarily 18-25-year-olds, with a focus on fitness, fashion, and music.
• 📈 Behavioural segmentation is crucial for planning product production and marketing campaigns to align with consumer buying patterns.
• 🌱 Lifestyle segmentation is about aligning products with the hobbies, interests, and life choices of the target audience.
• 💰 Income segmentation considers the earning potential and disposable income of consumers to determine product pricing and marketing strategies.
• 🚀 Gymshark's success is attributed to its effective market segmentation, focusing on age and lifestyle, and using social media and influencers for marketing.
• 📊 Market segmentation can lead to increased brand loyalty, repeat customers, and higher prices due to better alignment with customer needs.
• ⚖️ While market segmentation offers benefits, it can also increase costs and complexity, potentially leading to a loss of brand identity if not managed carefully.

Q & A

What is market segmentation and why is it important for businesses?

Market segmentation is a business tool that divides potential customers into groups, known as segments, based on several key factors and characteristics such as location, demographics, behavior, lifestyle, and income. It is important because it allows businesses to understand and meet the needs of their customers more effectively, leading to increased brand loyalty, repeat custom, and potentially higher prices due to reduced price sensitivity.

How does Gymshark apply market segmentation in its business strategy?

Gymshark applies market segmentation by focusing on specific demographic and lifestyle segments. They target 18-25-year-olds who are interested in fitness, fashion, and music, and develop products and marketing strategies that cater to these interests. They use social media and influencers effectively to reach this audience.

What are the different types of market segments mentioned in the script?

The script mentions several types of market segments including geographical, demographic, behavioral, lifestyle, and income-based segmentation. Each type focuses on different characteristics of the target market to tailor products and marketing strategies.

How does geographical segmentation differ from demographic segmentation?

Geographical segmentation is based on the location of potential customers, often leading to businesses altering their product offerings according to the location. Demographic segmentation, on the other hand, is based on characteristics of the target market such as age, gender, race, religion, and sexual orientation.

Can you provide an example of how Gymshark uses demographic segmentation?

Gymshark uses demographic segmentation by targeting 18-25-year-olds of any gender who are interested in fitness. They develop products that meet the wants and needs of this age group and use social media platforms and influencers popular among this demographic to promote their brand.

What is behavioral segmentation and how does it relate to Gymshark's sales strategy?

Behavioral segmentation relates to consumer buying behavior and how it varies between different market segments. Gymshark uses this by holding two major sales each year, particularly focusing on Black Friday, to capitalize on the buying behavior of their target market, leading to significant sales during these periods.

How does lifestyle segmentation play a role in Gymshark's marketing approach?

Lifestyle segmentation focuses on the hobbies and interests of people. Gymshark identifies its target audience's lifestyle revolving around fitness, fashion, and music, and uses this understanding to create marketing strategies that resonate with these interests, such as collaborations with influencers in the fitness and fashion space.

What are the potential benefits of market segmentation for a business like Gymshark?

The benefits include a better understanding and meeting of customer needs, increased brand loyalty, repeat custom, reduced price sensitivity, and the ability to charge higher prices, leading to increased revenue and profitability.

What could be some drawbacks of conducting market segmentation?

Drawbacks include potential increased costs for market analysis, research and development, and marketing to various segments. It may also lead to a larger product range, potentially causing confusion for customers and loss of brand identity.

How does Gymshark ensure its product offerings remain consistent despite operating in 131 countries?

Gymshark maintains consistent core products across all locations, focusing on the belief that young gym-goers want functional and stylish gym gear. Their vision remains true regardless of the customer's location.

What is the role of influencer marketing in Gymshark's success?

Influencer marketing has been crucial for Gymshark's success, as they were early adopters of this model in the health and fitness industry. They effectively targeted their demographic through influencers like Lex Griffin and Nikki Blackketter, who are followed and admired by their target audience.