Market segmentation entails research used to determine how an organization divides its customers into smaller groups or cohorts based on certain characteristics such as age, behavior, income, personality traits among others. These segments are then used to optimize products and enhance advertising to different customers.
Market segmentation is among the most effective tools available for marketers to target a specific group. It eases the marketer’s work to personalize campaigns and put the focus on only what is necessary. Members of these small groups share similar characteristics and have a lot of aspects in common.
Bases of market segmentation
Segmentation is simply dividing groups into smaller groups based on some basis. This basis may range from aspects such as age, gender among others. It can also be based on psychographic factors such as interest, attitude, and values among others.
Gender is among the simplest way of segmentation, yet very important. This is because the interests and wants of male versus female vary greatly. Marketers employ different marketing and communication strategies for both groups. This type of segmentation is particularly important when collecting data on aspects such as clothing, cosmetics, jewelry industry among others.
Another form of segmentation is by age group. Segmentation through this category a unique way for personalization. Another segmentation that matters is by income levels. Income determines the purchasing power of the target group. It also helps marketers determine if a certain product will sell or not. Other forms of segmentation include place, occupation, usage, lifestyle among others.
Types of Market Segmentation
There are four key types of market segmentation and all these vary in terms of the applicability and implementation. They include the following;
This is one of the simplest forms of segmentation and also the widely used. Most companies employ it to get the right population who are using their products or services. With this segmentation, you basically divide a population-based on variables. Demographic segmentation has its own variables too, such as gender, age, income, family size, religion among others.
This type of segmentation helps in dividing a population on the basis of their behavior, decision-making patterns as well as usage. A good example is how young people may have a certain preference of some products over others. Smartphone market employs this use of segmentation.
With psychological segmentation, the emphasis is placed on the lifestyle of people, their interests, activities as well as opinions. Psychological segmentation is very similar to behavioral segmentation. However, it takes into account the psychological aspects of consumer buying. These psychological aspects may finally become a consumer lifestyle.
This is a type of segmentation that divides people on the basis of geography. Potential customers will always have different needs that are based on their geography and their location. In cold countries, marketers may try this segmentation to evaluate if heating products would be accepted or not. This type of segmentation is the easiest to use, but it is not very much adopted due to advances in the other methods.