Consumers are different for every market and product; marketers have long realized this. Other categories include gender, location, attitudes, age, needs, and social factors.
Some people categorize segmentation as science, and some as the arts and group them. Sellers use the concept of segmentation to sell their products and even their services.
What is a Target Market?
A target market represents a group of potential customers who will most likely buy a company’s products or services. These customers can be individual consumers or organizations.
What is market segmentation?
Market segmentation represents creating customer groups by dividing the target market into more defined categories.
Suppose we say that sellers or businesses sell their products to every consumer; that would be wrong because consumers’ categories hardly consume some products. So, on a realistic basis, products have their consumer classes, which can vary in age, Income, gender, and needs.
If an Iranian company wants to sell its fine handmade carpets, only a few people with a good income, and probably those who own the houses, will buy them. Not all classes will take the initiative.
For this reason, companies and sellers do extensive research to identify their target market, which class of consumers will buy their product, and why they will buy it. The target indicates their aim, and the market says the consumers. There are several major classes of target markets.
Examples of target markets are:
- A male who drives a car
- The older woman who owns a home in Florida
- Criminal Law Firms in Ohio
- Single people in the city
How Was the Target Market Segmented In Business?
Target Market can be segmented into seven steps:
- Step 1: Review of Audience Information.
- Step 2: Decide Whether to Segment.
- Step 3: Determine the Segmentation Criteria.
- Step 4: Segment Audiences
- Step 5: Decide which Segments to Target.
- Step 6: Assess the Proposed Segments.
- Step 7: Develop Audience Profiles.
Since the catcher wants to catch a specific fish, he will throw the particular lure according to its size and design to see it. Similarly, when companies wish to reach their target market, they throw the interest ( product) according to the consumer class’s demands and needs. Only then will they respond to the advertisement; the other might be indifferent or repelled by it.
Why is market segmentation an essential variable in strategy implementation?
Market segmentation allows a small firm to compete successfully with a large firm, allows a firm to operate with limited resources, and allows marketing mix variables to be directly affected by market segmentation decisions.
Your product’s message (advertisement) must reach consumers more effectively and efficiently in the business market. To shape the news, you need to know about your customers’ needs and demands or values. This will help a lot more than advertising.
How does McDonald’s segment its market?
McDonald’s segments the market by dividing a large group into different customer groups, each with the exact needs and demands. For example, McDonald’s is the name of the burger-making restaurant, and it’s super in its marketing because of the marketing strategies it adopts. McDonald’s sells vegetarian burgers in India since there are more vegetarian businesses than vegetarian ones. The same McDonald’s sells its burgers with seafood patties in Bangladesh since people like to eat fish more.
4 Types of Market Segmentation
- Demographic segmentation
- Behavioral segmentation
- Geographic segmentation
- Psychographic segmentation
Segmentation helps sort out the large market group divided into smaller categories, each with specific characteristics and certain behaviors.
What is Demographic Segmentation?
Demographic segmentation breaks a market into segments based on age, Income, gender, race, education, religion, social class and nationality, and family size.
Demographic Segmentation Explanation
In this life and age cycle segmentation category, the consumer is identified as a potential customer based on age. Let us say if there is a couple in their 50s. They tend to have their interests according to age and won’t buy diapers anymore. So, this example defines the demography market segment. You need to target your market according to their needs, and in these segments, you will learn about their needs and demands by age.
Young ladies would be more interested in buying fashionable, fancy clothes than dull colors.
Gender segmentation This market segment defines the needs and demands of the consumer based on gender. For example, m.a.c is not popular among men since it is a cosmetics brand. This example goes well with other cosmetic brands as well. There is a massive difference in the choices of both genders. After age, gender defines the buying behavior of the consumer well.
Social class and income segmentation Income can be a fair market segment that defines the potential consumer’s buying behavior since a BMW is not for the social class under labor. There are many examples, but Income is not treated as a vital market segment to define the target market since many people look at money differently. For example, not all middle-income earners are well-reserved and save money, and not all high-income earners spend their money.
What is Geographic Segmentation? Practical Examples
The geographic segment describes the target market as it divides them into different subgroups based on the area they live in. This can have a significant impact on the target market since the site and its surroundings have a profound effect on individuals, shaping their decisions and buying behavior.
The geographic segment of the market nearly defines the buying behavior and social class of society. Still, let’s only go with geographic segmentation. That won’t be as effective and would be a wrong assumption in business, so people who are sellers in the market try to comprehend the complete research with the combination of geographic and demographic segmentation to study the customers’ buying behavior.
What are Behavioural Segmentation Examples?
The behavioral segment in the market defines the buying behavior of the people or group of people when they are trying to buy something new in the trend. Let’s say Apple releases its latest iPhone and wants to see if, in some of the specific areas, people would be interested in buying. This will tell a lot about people’s class and their behavior towards purchasing a new thing or something new, or maybe they are more interested in buying those products that have gone mainstream.
Behavioral Segmentation Occasions: Timings play a role and impact people’s buying behavior. For example, people buy jackets mostly in winter and swimsuits in summer. People buy mainly in the end seasons when they can get things at a discount, and most of them believe in the year-end when they can buy with their bonus money.
So buying does have its timing in people’s lives. So this. This is to be considered one of the segments to know about the target market.
Behavioral Segmentation Benefits: Benefit segmentation breaks the market into segments and identifies what customers look for in the products they buy.
Behavioral segmentation Brand loyalty in customers: Brand loyalty is a factor in buying behavior. Many people are incredibly loyal to a specific brand and buy all its new releases. Others are dedicated to two to three brands at a time and find their products alternatively.
Psychographic Segmentation
Psychographic segmentation allows marketers to understand the motivation behind buying decisions, such as personality and lifestyle profiles. Examples of psychographic segmentation products include organic food, expensive watches, and luxury mobile manufacturing brands.
For example, expensive watches are not created for each person or every class. So, in marketing, you need to do particular psychographic segmentation and target unique people’s profiles.
Psychographic segmentation is pretty difficult for marketers to apply to different markets. Some big companies conduct this research to find their target market, and they are more actively seeking the answers to these questions, as explained above. These questions prove how your potential customers would be attracted to your product based on their personality concerns.
Since these answers are not open and one has to go through much research and surveying to achieve the actual data and not the remote data work for the big market, getting the big data is the ultimate goal. There are many types of research to get the data, and some are based on the assumptions that people who use Facebook and the kind of posts they upload define more about their personalities. The pages they liked and the comments they wrote say a lot.
This type of oofaata collection is more prone to errors and less effective. Data collection to find the potential target market should be more authentic and used for business.
Market segmentation quiz
Which of the following statements about market segmentation is true?
A hospital marketing manager can segment the market by:
A. The portfolio of products or services offered
B. Choosing a select group of customers
C. The characteristics or needs of various groups
D. All of these are correct
The right answer is D. All of these are correct.
Which consumer market segments are the best match with Benihana?
Benihana, an American restaurant that franchises 116 Japanese cuisines, targets middle-income business people and the upper-middle class. As a result, Benihana’s business market segmentation is well done.
When a market segment is large or profitable enough to serve, it is termed substantial.
What is labor market segmentation?
Labor market segmentation represents market segmentation by occupation, geography, and industry.
Which of the following are b2c marketing segmentation?
a) Customer-based
b) Psychographic
c) Product-use based
d) supplier-based.
A combination of geographic demographic and psychographic data can be used to create a customer profile.
The correct answer is Psychographic because business consumers (B2C) segmentation uses Behavioral, Geographic, Demographic, and Psychographic data. When B2C markets divide the potential market according to values, attitudes, and lifestyles, they use psychographic segmentation.
A segment is less attractive if it:
A) It is difficult for new entrants to enter
B) is substantial
C) is actionable
D) already contains many strong and aggressive competitors
E) contains weak suppliers
The correct answer is for D because A segsegment it less attractive if it already concontains strongd aggressive competitors.
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