If you've studied marketing or spent any time hanging around marketing geeks, then you know something, probably quite a bit, about "consumer segmentation". It is one of the fundamental tools of modern marketing. Segmentation is simply the process of dividing your potential customers into different groups, the notion being that it is easier and more effective to tailor an offering to a relatively small group of people with similar wants and needs than it is to try to mass-market something to the world. (It’s surprisingly difficult to sell worms to people who aren’t fishermen, gardeners, or practical jokers). Segmenting our potential markets is something that we all do intuitively. We know that most products, or homes for that matter, are not going to appeal to everyone. So, we try to define in our minds the “perfect buyer”. Segmentation models are typically built around demographics (age, income, gender…), psychographics (lifestyle, personality, values…), geography (city, neighborhood, zip code…), and other personal attributes. It is common to see people segmenting their potential customers based on things like gender and zip code, in part because it is easy to get this information, and get it in a form that can be immediately put to use. There are more than a few list brokers who will sell or rent you a list of women 55 and older who live in zip code 90210. The big question when looking at segmentation is: Are the segments and the attributes that define them really distinct and useful IN THE CONTEXT OF YOUR OFFERING? A good segmentation model should be based on sound data, give you a sense of what the key purchase criteria for each segment are likely to be, and by extension how best to communicate with them. Income and net worth are common attributes in segmentation models. Everybody wants a piece of the folks with the fat wallets, and understandably so. Robert Frank, the author of Richistan, the popular book on the affluent, divides the wealthy into three main groups (based on net worth):Richistan * Lower Richistan: $1-$10 million * Middle Richistan: $10-$100 million * Upper Richistan: $100 million-$1 billion Segmentation by net worth or income is an obvious approach. It is particularly useful for qualifying potential purchasers and looking at potential market size, but it isn’t always as useful as one might think in a working segmentation model.
This can be difficult because many customers have changing needs and demands and they can be very different from one another. Skills based segmentation involves internally focusing on whether or not the company offers the skills necessary to target the demand of those customer bases. These processes work together to find the best customer demand to target and it ensures the core competencies of the business align with the demand of the customer they are
Terrell, E. (n.d.). Market Segmentation. (Business Reference Services, Library of Congress). Retrieved April 6, 2014, from http://www.loc.gov/rr/business/marketing/
Segmentation variables can be classified into four major classes; geographic, demographic, psychographic and behavioural. The use of these categories either individually or in combination assists companies to identify and establish market segments which is relevant to the product or service they are offering. This in turn helps these organisations to evaluate the relevant segments to choose the pertinent target market.
Caroline and Jennifer said that ‘Market segmentation is a crucial marketing strategy. Its aim is to identify and delineate market segments or set of buyers which would then become targets for the company’s marketing plans.’ (Tynan and Drayton, 1987) There are many ways to segment the market, such as age, region, environment, psychology and wages (Hall, Jones and Raffo, 2010).
Segmentation is the process of identifying different macro-groups of customers (i.e. segments) based on their common characteristics. The process of choosing a target segment, on which to focus marketing activities on, is a process named targeting.
To begin with, it is crucial to appreciate the meaning of segmentation and targeting because these two terms lay the foundation for this report. Consequently, segmentation is dividing a market, into groups of consumers with homogenous traits in order to provide each group with the desired product. What is the meaning of targeting? It is where an enterprise evaluates every segment with an objective of identifying segments with promising business opportunities. Considering the nature of the product in question, it sufficed to mention that liquor- filled chocolates are to be sold to adults.
“A segment is a set of buyers who share common needs or characteristics”(Marketing by Tony Gray (2000))
Many factors should be addressed when defining a target market. These factors include market segmentation, product life cycle, and the four "P's" that make the marketing mix. Market segmentation is the process of dividing a total market into market groups consisting of people who have relatively similar product wants and needs. There are four major segmentation variables: geographic, demographic, psychographic, and behavioral. Geographic segmentation includes world region, country region, city, density, or climate. Demographic segmentation can consist of age, gender, income, occupation, education, race, religion, or nationality. Social class, lifestyle, and personality fall into the psychographic segment. The behavioral segment divides buyers into groups based on their knowledge, attitudes, uses, or responses to a product (Bethel, 2007). Once the market segment is identified, that market can be targeted.
Segmentation is the process of determining the breakdown of the target market into smaller specific variables that make it easier to evaluate. Gabbott M (2004, p 159) describes the consumer related segmentation variables as being Geodemographic, Psychographic and Behavioural.
Market segmentation allows marketers to easily categorise customers in order to identify target markets and products for certain types of customers. Elaborating on this, Pine, Peppers and Rogers (1995) mention that market segmentation is a set of broad characteristics that focus on a group of customers. Furthermore, Kotler (1988) states that segmentation is the act of separating a specific set of customers, that open up markets, with apparent needs, behaviours and characteristics that require specific products. With this being said, marketers use this foundation in order to build and gain more information to target certain markets.
Segmentation is a procedure of splitting up the market into different groups of consumers who the same common needs and wants. There are different types of segmentation like geographical segmentation, behavioral segmentation, demographic segmentation, lifestyle segmentation. Lexus divided their vehicles into two categories they four wheel drives and two wheel drives.
It does involve grouping of people (customers) into segments that do share common needs or will give a common reaction to a marketing event by the business. Toyota’s third generation Prius has created a new segment for hybrid cars along with its competitors. This segment caters to the need of the environmentally conscious buyer. This has opened up a whole new ...
Market segmentation means dividing the market into distinct groups that have common needs and will respond similarly to marketing action. Each segment must be unique, have common needs, and respond in a similar manner to marketing efforts. Target market is the group of potential customer that has been selected by business to focus its marketing efforts towards. This is the group the business wants to sell its products/services to. Positioning refers to the image created in the minds of customer of its product or brand. It is a perception created in the minds of the consumer relative to that of its competitors.
Segmentation is a marketing strategy that involves separating a wide target market into small groups of customers who share the common need of using or purchasing the product that needs to be marketed. Market segmentation strategies are utilized to identify these groups of consumers and strategies are designed and implemented to make the product or service appeal to them. Support and also the product will be strategically placed in order to successfully achieve the ultimate marketing goal. Businesses and organizations may come up with different type of strategies involving different products and catchy phrases depending on the product or the target segment.
Demographically we can segment the market into groups based on age, gender, family- size, income, family life cycle and occupation.