Question

what is market segmentation? and what are the different types of segmentation? also provide real world examples. Thank you

Answer 1

Market Segmentation

An efficient tool through which marketers and businesses can target their customer groups, market segmentation helps businesses in the personalization of marketing and advertising campaigns, bring focus to the important and necessary, and reach out to the target customer base at low costs.

Market segmentation can be defined as the process through which a business classifies or divides a market and customer base into different groups/segments, based on the peculiar characteristics of each group. A group or a given market segment will share at least one common characteristic amongst all its members. A custom marketing mix may be created for each of the segments, which provides for targeted as well as cost-effective business promotion. The marketing mix here is a set of characteristics (4 Ps including product, price, promotion, and place) that a business uses for promoting itself. Market segmentation can be done based on (but not limited to):
a. Gender
b. Income
c. Age group
d. Occupation
e. Place
f. Lifestyle
g. Usage

Types of Market Segmentation

The common types of market segmentation are given below.

Demographic Segmentation- demographic segmentation involves segmenting the market based on demographic factors including gender, income, age, religion, race, occupation, nationality and others. Demographic segmentation involves a wide range of factors and characteristics and hence is used in almost all industries including gadgets, automobiles, beauty products, and others. For instance, Samsung has a more premium range of smartphones in the "Galaxy" range, while another range of phones from the company, the "M" series includes phones with lesser pricing and with not-so-advanced features. Automobile manufacturers including Renault, Hyundai, and others offer cars for customers in different income categories, with the pricier cars being more luxurious and with higher-powered engines. Garnier has skincare products for both men and women.

Geographic Segmentation- because customers of different regions and geographies of the world may have different kinds of requirements, geographic segmentation is important for businesses operating in different regions and countries. For instance, Mc Donald’s stresses on improving its vegetarian burgers, and offers more edible products in this category, when it operates in a country like India, where the majority of the population prefers vegetarian food. Companies also customize their winter clothing and products, have more diversified range, and also promote these offerings more and for several months in northern American states and in Canada, where the winter season can be very harsh.

Behavioral Segmentation- The market can also be segmented based on user behavior or how the customers are using the products, and their preferences, usage, and decision-making patterns. Marketers consider the extent to which a customer knows about the product and the way he uses the product. While some people would know about the product more, others would not have much information about it. Some would be using the product while others may be prospects. Users and customers can be labeled or designated as loyal to the brand, loyal to the competing for brand and brand-neutral as well, based on their behavior towards making product purchases. The segmentation helps companies deliver more personalized products, prioritize customer bases and predict the future.
For instance, Sony offers smartphones that are specially personalized and have extra features to make music lovers prefer these phones. In the same way, phone manufacturers including Xiaomi offer phones with more powerful CPUs and are better suited for gaming.

Psychographic Semination- in this kind of market segmentation, a marketer can segment the customers and market based on the personality, marital status, education and traits of the customers. People with different psychographic traits may value things differently, and understanding these traits help marketers create products that the customer would prefer. For instance, motorcycle brands and companies like Harley Davidson target customers with a more manly, fearless and masculine attitude.