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Investments include the purchase of things that can produce goods or provide an income. Typically, only rich people or institutional investors hold alternative investment assets. In fact, most brokers of alternative investments have high minimum investments and fee structures. HSBC Private Bank says that unless you are an experienced or financially sophisticated investor, alternative investments are not for you.
You must be willing to bear the risks that such investments carry. When asked what an alternative investment is, Andrew Klausner wrote the following in Forbes :. In fact, investing in timber is considered by many to be an alternative investment. He explains how an alternative investment offers the opportunity to access different sources of return. They also offer the potential to manage portfolio risk better. For example, marketing to Spanish-speaking consumers would be very different than marketing to English-speaking consumers.
Or, a company selling heaters would likely need to know where their customers in colder climates were as opposed to those in warmer climates who may have less need of their product. Victoria's Secret primarily targets women, while their brand PINK is targeted more toward teenage girls and women. However, the brand has also long marketed itself to men - usually husbands or boyfriends of women who are looking to purchase gifts.
Given the brand's pricing, Victoria's Secret also targets a relatively affluent segment with additional income to spend on lingerie or mid-price undergarments. Apple AAPL - Get Report has made its fortune by segmenting the overall electronics market into primarily early adapters and affluent market segments. Both are large banks with a multitude of different products that require market segmentation to best market them individually.
While market segmentation is, in essence, essential to a business' success in focusing their resources on marketing to the right groups, there are several other benefits of market segmentation. For one, market segmentation helps companies zero in their resources on areas where they have a better chance of success. Instead of marketing to an entire group of people in need of jackets, a sportswear company like Nike NKE - Get Report could market to people in need of water-resistant running jackets - who would likely fall into a sporty, active lifestyle market segment.
Another major benefit of market segmentation is its usefulness in helping companies narrow their message to be more unique for specific consumers. Instead of sending out generic, mass marketing messages or advertising, market segmentation allows companies to customize messages to niche audiences that are more likely to be in need of the specific product that company is offering. This can boost customer acquisition through advertising and keep costs lower.
Market segmentation also helps companies identify underserved markets that may be able to help them expand into new territory - and grow their profits. Given its numerous advantages, market segmentation is a major marketing strategy used by the most successful companies.
Receive full access to our market insights, commentary, newsletters, breaking news alerts, and more. I agree to TheMaven's Terms and Policy. What Is Market Segmentation? Market Segmentation Definition Market segmentation is the process of dividing prospective consumers into different groups depending on factors like demographics, behavior and various characteristics. Types of Market Segmentation But what types of market segmentation are there?
Behavioral As the name may suggest, behavioral market segmentation is focused on how consumers interact with a product, or how much they know about a product. Demographic One of the major ways to segment the market is by demographics. Psychographic With psychographic segmentation, companies examine consumer's lifestyles, personality, interests, opinions, social class, habits and activities to better ascertain their needs.
Geographic Geographic information about consumers can be very helpful and even essential to marketing to the right groups. By Scott Rutt. By Rob Lenihan. By Tom Bemis. By Tony Owusu. By Rob Daniel.
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