MARKET SEGMENTATION

Market segmentation is the process of dividing the market of potential customers into groups or segments based on different characteristics. It  created are made up of consumers(End-users)who will respond similarly to marketing strategies and who share traits such as similar interests, needs, or locations.

It makes it simple for marketers to personalize their marketing campaigns.

Market segmentation is a marketing concept that divides the entire market set up into smaller subsets, including consumers, with a similar taste, demand and choice.

A market segment is a small entity within a large market consisting of like minded individuals.

One market segment is completely different from another segment.

A market segment includes individuals who think on the same lines and have similar interests.

Individuals of the same segment react in a similar way to market fluctuations.

Basis of Market Segmentation(Demographic Segmentation) 

1. Gender

Vendors divide the market into smaller segments based on gender. Both men and women have different interests and choices, and thus there is a need for division.

Organizations require different marketing strategies for men which obviously will not work in the case of women.

A woman does not buy a product for men and vice versa.

The segmentation of the market is important in many industries such as cosmetics, footwear, jewelery and apparel industries by gender.

2. Age Group

Segmentation based on the age group of the target audience is also one of the methods of market segmentation.

The product and marketing strategy for teenagers will obviously be different from that of children.

Age Group (0 - 10 years) - Toys, Nappies, Baby Food, Pram

Age Group (10 - 20 years) -  Apparels, Books, School Bags, Accessories, etc. 

Age group (20 years and above) - Cosmetics, anti-aging products, magazines, apparels and so on

3. Income

Marketers divide consumers into smaller segments according to their income. Individuals are classifies into segments as stated by their monthly earnings.

There are three categories:

High income group

Mid income group

Low income group

Stores catering to the higher income group have a different range of products and strategies that target the lower income group. 

Shoppers Stop ,Carrefour, Pantaloons target the higher income group, as compared to Vishal Retail, Reliance Retail or Big Bazaar, catering to individuals from the lower income group.

4. Marital Status

Market segmentation can also occur according to the marital status of individuals. Travel agencies will not have the same holiday packages for single and married couples.

5. Occupation

Office goers will have different needs than school / college students.

A beach house shirt or a funky t-shirt would be no taker in a zodiac shop as it caters specifically to professionals.

Types of Market Segmentation

1. Psychographic segmentation

The basis of such division is the lifestyle of individuals. Personal perspectives, interest, value help marketers classify them into small groups.

2. Behaviouralistic Segmentation

Customers' loyalty to a particular brand helps classify marketers into smaller groups, each group consisting of individuals loyal to a particular brand.

3. Geographic Segmentation

This segmentation refers to the classification of markets in different geographical regions. A marketer may not have the same strategy for individuals living in different places.

Need for Market Segmentation (Why Market Segmentation?)

Not all individuals have the same requirements. A man and a woman have different interests and likes towards different products. A child will not need anything that an adult needs. A school child will have a different requirement than an office goer. Market segmentation helps marketers bring together individuals with similar options and interests on similar platforms.

Market segmentation helps marketers formulate appropriate marketing strategies and promotional plans according to the tastes of individuals in a particular market segment. A male model will look out of place in an advertisement promoting female products. Marketers need to be able to relate their products to target segments.

Market segmentation helps marketers understand the needs of target audiences and adopt specific marketing plans accordingly. Organizations may adopt a more focused approach as a result of market segmentation.

Market segmentation clearly tells customers what to buy and what not to buy. A rado or omega watch will have no takers among the lower income group as they cater to the premium segment. College students rarely visit a Zodiac or Van Heusen store because the goods delivered by these stores are mostly for professionals. Individuals from lower income groups never use Blackberry. In simple words, the segmentation process goes much further to influence consumers' purchase decisions.

Low-income individuals would obviously prefer the Nano or the Alto over the Mercedes or BMW.

Market segmentation helps organizations to target the right product at the right time. Geographical segmentation classifies consumers according to their locations. Grocery stores in the country's cold states will stock coffee throughout the year compared to places that define the winter and summer seasons.

Segmentation helps organizations to know and understand their customers better.This helps organizations to focus their efforts on the target audience and achieve appropriate results.