Market Division Criteria
In the dynamic world of business, understanding the needs and preferences of customers is a crucial aspect for success. One such strategy that businesses employ is market segmentation, a method that divides a broad target market into smaller, more manageable groups based on shared characteristics.
Homogenous demand products, such as soap, shampoo, detergent, and food, are always in demand regardless of weather conditions. However, the cosmetic market, for instance, demonstrates diffused demand, characterised by a large number of options due to varying tastes among consumers.
Market segmentation can be approached from various angles. Demographic segmentation profiles customers based on statistical traits such as age, gender, income, education, occupation, marital status, and family size. Geographic segmentation, on the other hand, segments customers based on location factors like region, climate, culture, language, or population density.
Diving deeper, psychographic segmentation groups customers according to psychological attributes such as lifestyle, values, interests, attitudes, personality traits, and opinions. Behavioral segmentation, meanwhile, divides the market based on consumer behavior such as usage frequency, brand loyalty, product usage occasions, and benefits sought.
Understanding the needs, wants, and demands of customers is essential for market segmentation. Analyzing these aspects helps to understand the uniformity or diversity of demand for a product. Profiling customers is an integral part of market segmentation, and it can vary depending on the type of segmentation.
Once the demand pattern and customer profiling are ready, the market segment to be targeted is determined, which can ultimately help with positioning. For example, an umbrella, being a seasonal product, would be targeted differently from homogenous demand products.
Psychographic segmentation, which specifically looks at how consumers live, activities, interests, and opinions that shape buying decisions, can help businesses target customers based on their values, attitudes, and lifestyles.
Businesses sometimes use B2B segmentation based on industry type, company size, and purchase behavior to address organizational customers. Combining different types of segmentation methods enables businesses to better identify and target distinct customer groups, leading to more effective marketing strategies and higher customer satisfaction.
For a comprehensive understanding of market segmentation, a complete series on Segmentation is available. Additionally, a video by Marketing91 provides valuable insights into the concept of Market Segmentation. By embracing market segmentation, businesses can tailor their offerings to meet the unique needs of specific customer groups, fostering customer satisfaction and driving growth.
The choice of effective marketing strategies in the business world can be improved by combining various types of segmentation, such as demographic, geographic, psychographic, and behavioral segmentation. This helps businesses to better identify and target distinct customer groups, ultimately leading to increased customer satisfaction and growth.
Businesses can also employ psychographic segmentation to understand consumers' values, attitudes, and lifestyles, which can aid in tailoring offerings to match specific target groups and drive growth.
