For segmenting market, there is no single method. Market structure is viewed by the marketer by seeing various variables singly or in combination. Following are the major variables of market segmentation that are used in segmenting market or below are the 4 different types of market segmentation you need to know.
Types of Market Segmentation
- Geographic Segmentation
The dividing of the market into various geographical units like states, nations, countries, regions cities or neighborhoods is referred to as geographical segmentation.
The business organization may determine to function in one or more geographical areas, or to function in all areas but consider the geographical variations in wants and needs.
Read More: Levels of Market Segmentation
The products, promotions, advertising and sales efforts are localize commonly in order to match the requirements of geographical areas.
Demographic Segmentation
The division of market into groups on the basis of gender, age, income, family size, occupation, family life cycle, religion, nationality, education and race is referred as demographic segmentation.
For segmenting customer groups, demographic components are highly popular. Because the wants, needs and utilization rate of consumers mostly differ closely with demographic variables.
Also it is easy to evaluate demographic variables as compared to other variables. The demographic features should be known even after market segments are first specified by using other basis like behavior or advantages sought so that evaluation is made for size of target market and to reach it effectively. Following are main kinds of demographic segmentation.
- Age & Life Cycle Stage
- Gender Segmentation
- Income Segmentation
Psychographics Segmentation
The division of market into various groups on the basis of life styles, social class and personality features is referred to as psychographics segmentation.
Read More: Factors that influence the Business Buyer Behavior
People can show varying psychographics features even falling in the same demographic class. The people’s interest in different products is influenced by life styles along with the products they purchase express those life styles. This way of segmentation is becoming popular.
Markets can also be segmented by using personality variables. Marketers will provide their products personalities in accordance with the personalities of consumers.
Behavioral Segmentation
The division of market into different groups on the basis of customer knowledge, uses, attitudes or reaction to a particular product is referred to as behavioral segmentation.
For developing marketing segments, many marketers consider that behavioral variables are the effective beginning point.
The division of market into groups on the basis of occasions when the purchaser obtain the idea to purchase, utilize the item purchased or actually make their purchase is included in the area of occasion segmentation.
Similarly dividing the market into groups on the basis of various advantages is referred to as benefit segmentation.
Business organizations can utilize benefit segmentation to elucidate the benefit segment to which they are charming, its features and the main competing brands.
New benefits can also be sought by the business organizations along with the development of brands that provide those benefits. The market can also be divided on the basis of user status.
Segments of ex-users, nonusers, first-time users, potential users and regular users of a product are effective manners to segment. Another manner to segment the market is usage rates.
Read More: Business Buying Decision Process
The light, medium or heavy user groups may fall in this category. Market can also be segmented by using loyalty status. Consumers can be firm to stores, business organizations and brands.
Furthermore the consumers cannot be loyal, loyal to some extent or fully loyal. By studying loyalty patterns, an amazing portion of information can be uncovered.
Segmenting Business Markets
Many of the same variables are utilized by the consumer and business marketers to segment their markets. Business purchaser can be segmented on the basis of user status, benefits sought, loyalty status, usage rate or geographically.
Other additional and unique variables of this market are operating features, business customer demographics, purchasing approaches, personal features and situational components.
When business organization serves segments instead of entire market, these business organizations can acquire effective chance to provide superior quality products to its customers and obtain higher rewards for considering the needs of customers closely.
The business organization can further segment on the basis of geographic location or customer size, within selected industry. For effectively segmenting business markets, many marketers consider that benefits and buying behavior are the useful basis.
Segmenting International Markets
One or more of combination of variables can be used to segment international markets by the business organizations.
Read More: Steps in Marketing Research Process
The main components that can be utilized are economic components, geographic location, cultural components and political & legal components. An approach called Inter market Segmentation is utilized by many business organizations.
According to this approach, segments of consumers are prepared by business organizations that have same needs and purchasing behavior even they are living in separate countries. For example the teens of world have much in common.
Requirements for Effective Segmentation
All segmentations are not efficient, although there are many manners to segment the market. The market segments should have particular features in order to become useful. Following are the most important ones.
Measurability
The level to which purchasing power, size and profiles of a segment of market is evaluated is considered as measurability.
Accessibility
The level to which a segment of market can be serves and reached is termed as accessibility.
Substantiality
The level to which a segment of market is sufficiently profitable or large is termed as substantiality.
Differentiation
The level, to which a segment of market can ideally be vary and has the capability to react differently to various marketing programs and marketing mix elements, is referred to as differentiation.
Action Ability
The level to which given segment of market is attracted and served by designing efficient programs is known as action ability.
Business Studies Notes is a one place stop for all the business students who are looking for business studies class 11 notes, business studies class 12 chapter 5 notes, graduation and master.
