Market Segmentation

Market segmentation is a marketing concept which divides the market into different segments with consumers with a similar demand and preference. Since consumers in the same market segment are somehow alike, difference marketing tactics can be used based on the segment properties in order to maximize the effectiveness of marketing campaigns. There are 4 major ways to segment a market.

·                Geographic Segmentation

Geographic segmentation refers to the classification of market into various geographical areas. We can classify market based on continents, countries, urbanization level or climate.

Examples:

A home appliance retailer may not carry humidifier in humid countries, instead, it may carry more dehumidifier.

People in rural area may be more concern about the durability of auto vehicles and trends to buy more trucks than cars, whereas, city people prefer more stylish vehicles.

·                Demographic segmentation

This type of segmentation divides market based on people’s income, gender, age, race, occupation, family situation, etc.   

 Examples:

Marketing for super sport cars should only targets the very high income group, since other people cannot afford such an expensive car.

Feminine product should only target female customers, but not my dad.

·                Psychographic segmentation

The basis of such segmentation is the lifestyle of the individuals. The individual’s attitude, interest and lifestyle help the marketers to classify them into small groups.

Examples:

I weight the style of clothes more than the durability, while my mon is more concern about the durability.

·                Behaviouralistic Segmentation

Customers can also be classified by their behavior, such as, loyalties to a brand, reaction to discount, buying timing and frequencies.

Examples:

Promotional discount can be very effective to my mon and less effective to me.