What is Market Segmentation? Basis, Goals And, More

Market segmentation is a marketing strategy in which certain consumer groups identify so that particular product or product groups can present in a way that appeals to their interests.

The Basis of Market Segmentation

Gender

Marketers segment the market into smaller segments by gender. Both men and women take different interests and preferences, and thus, segmentation is needed.

Organizations need different marketing strategies for men that obviously won’t work for women. A woman does not buy a product for men and vice versa.

Gender-based market segmentation is essential in many industries, such as cosmetics, footwear, jewellery, and apparel.

Age Group

Separating the target audience by age group is also one of the forms of market segmentation.

Products and marketing strategies for teens will differ from those for kids.

Age group (0 – 10 years) – Dolls, Diapers, Baby Food, Strollers

Also, age group (10 – 20 years) – Toys, clothes, books, school bags

Age group (20 years and above): cosmetics, anti-ageing products, magazines, clothing, etc.

Income

Marketers divide consumers into small segments based on their income. People they segments on their monthly payments.

The three categories are:

high-income group

middle-income group

low-income group

Stores that appeal to the high-income group will have different product ranges and strategies compared to stores that appeal to the lower-income group.

Pantaloon, Carrefour, and Shopper’s stop target the high-income group compared to Vishal Retail, Reliance Retail or Big Bazaar, which appeal to the lower-income group.

Market Segmentation Goals

There are different market segmentation goals. Here we tell you what each one is:

Product:

Creating successful crops is one of the main goals of organizations and one of the reasons for conducting market research. It allows you to add the right features to your product and helps you cut costs to meet the needs of your target audience.

Price:

Another purpose of market segmentation is to determine the right price for your products. Then, identify the audience that will be willing to pay for it.

Promotion:

It helps you segment each segment and select them in different categories so that you can direct your strategies in the right direction.

 Location:

The final goal of segmentation is to decide how a product will be presented to each consumer group and make it enjoyable.

Types Of Market Segmentation

Psychographic Segmentation

The basis of this segmentation is the lifestyles of individuals. An individual’s attitude, interest, and value help marketers categorize them into small groups.

Behavioural Segmentation

Customers’ loyalty to a particular brand helps marketers divide them into smaller groups of individuals, each loyal to a specific brand.

Geographical Segmentation

Geographical segmentation refers to the market’s classification according to various geographical areas. A marketer cannot have similar strategies for people living in different places.

Nestle promotes Nescafe year-round in the colder states of the country compared to places where the summer and winter seasons are well-defined.

McDonald’s in India does not sell beef products as it is strictly against the citizens’ religious beliefs, while McDonald’s in the USA freely sells and promotes beef products.