Basis for Market Segmentation
What is Market Segmentation?
Market segmentation is the process 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. This enables businesses to tailor their marketing efforts and products to meet the specific needs of different segments.
What are the main bases for Market Segmentation?
The main bases for market segmentation include:
- Demographic Segmentation: Dividing the market based on variables such as age, gender, income, education, occupation, family size, and marital status.
- Geographic Segmentation: Segmenting the market based on location such as region, country, city, climate, and urban or rural setting.
- Psychographic Segmentation: This involves dividing the market based on lifestyle, personality traits, values, opinions, and interests.
- Behavioral Segmentation: Segmenting based on consumer behaviors such as purchasing habits, spending habits, user status, brand loyalty, and benefits sought.
How do companies determine the criteria for segmenting their market?
Companies determine the criteria for segmenting their market by conducting market research, analyzing consumer data, and using various tools such as surveys, focus groups, and data analytics to identify patterns and common characteristics among their customers.
What is the difference between segmentation and targeting?
Segmentation involves dividing the market into distinct groups with common needs or characteristics. Targeting is the process of evaluating each segment’s attractiveness and selecting one or more segments to enter. Essentially, segmentation identifies the “who” while targeting determines the “which” segments to focus on.
How often should companies reevaluate their Market Segmentation?
Companies should reevaluate their market segmentation regularly, typically annually, or whenever there are significant changes in the market environment, consumer behavior, or business strategy. This ensures that their segmentation remains relevant and effective.
Basis for Market Segmentation
Market Segmentation is a crucial process in marketing that involves dividing a broad target market into smaller, more manageable groups of consumers who have similar needs, characteristics, or behaviors. Market Segmentation can be done based on Psychographic Attributes, Geographic Attributes, Behavioural Attributes, and Demographics.