Market Segmentation is the act of dividing a broad consumer or business market, normally consisting of existing and potential customers, into sub-groups of consumers based on some type of shared characteristics.it is a marketing term referring to the aggregating of prospective buyers into groups or segments with common needs and who respond similarly to a marketing action. it enables companies to target different categories of consumers who perceive the full value of certain products and services differently from one another.
Bases of Market Segmentation
Geographic Segmentation is a common strategy when you serve customers in a particular area, or when your broad target audience has different preferences based on where they are located. This marketing approach is common for small businesses that serve a wide demographic customer base in a local or regional territory. They can segment a market by usage rate, benefit, and psychographics, demographic, or geographic methods. The more precise the segmentation strategy that a marketing department uses to effectively reach their core target market, the more sales will result in the long run.
Demographic Segmentation is market segmentation according to age, race, religion, gender, family size, ethnicity, income, and education. Demographics can be segmented into several markets to help an organization target its consumers more accurately. demographic factors. Socioeconomic characteristics of a population expressed statistically, such as age, sex, education level, income level, marital status, occupation, religion, birth rate, death rate, the average size of a family, the average age at marriage.
Psychographic Segmentation involves dividing your market into segments based on different personality traits, values, attitudes, interests, and lifestyles of consumers. This segmentation is advantageous because it allows you to engage in product design and marketing in a focused manner. it has been applied to the study of personality, values, opinions, attitudes, interests, and lifestyles. Because this area of research focuses on activities, interests, and opinions, psychographic factors are sometimes abbreviated to AIO variables.
Behavioristic Segmentation divides the market into groups based upon variables such as occasion, benefit sought, user status, user rate, loyalty rate, readiness stage, and consumers attitude. a more focused form of market segmentation that groups consumers based on specific behavioral patterns they display when making purchasing decisions enabling producers to adapt their marketing approach to specific groups.
Volume Segmentation the division of a market into segments on the basis of the varying volume of demand for the product by individuals, groups or types of customers; typically, the segments are ranked to denote heavy usage, medium usage or light usage.
Product-space Segmentation is a flexible way of grouping products. In a similar fashion to a target group, a product segment contains all products that possess a particular combination of product attributes. Product segmentation simplifies both campaign planning as well as the creation of condition records in trade promotion management
Benefit Segmentation is dividing your market based upon the perceived value, benefit, or advantage consumers perceive that they receive from a product or service. You can segment the market based on quality, performance, customer service, special features, or other benefits. This approach focuses on those types of benefits that consumers seek for in buying products.