Market Segmentation And Its Advantages

• Tweet
• Pin It

Market Segmentation can be defined as dividing a market into sub-sets which consists of people who share homogeneous characteristics and thereby demand similar kind of products and/or services. These products may share certain common features based on pricing, utility, etc. A market segment responds to a similar market stimulus.

Types Of Market Segmentation

Market Segmentation can be broadly classified into Geographic, Demographic, Psychographic and Behavioral.

Geographic Segmentation divides the market on the basis of geographical locations such as nations, states, rural areas, urban areas, etc. It seeks to identify and segment consumer preferences and habits across various regions. For instance, consumers living in urban areas demand more of high-tech products as compared to people in rural areas.

Demographic Segmentation calls for grouping of people on the basis of their demographic characteristics viz. age, gender, income, education, occupation, family size, etc. For example, women’s preference for cosmetics is different from men’s preferences. Products such as lipsticks, nail paints are demanded by the section of the market comprising of women. Moreover, people belonging to the rich section of the society harbor a taste in luxuries. But the lower income class may not share the same interest.

Psychographic Segmentation seeks to identify and group consumers on the basis of socioeconomic classification, lifestyle and personality. Some people are innovators who possess a high self esteem and their purchase habits reflect their taste for niche-oriented goods and services. On the other hand, people who belong to the thinker category choose and buy products by assessing their functionality and durability.

Photo Vredit: Micronixnetwork.com

Behavioral Segmentation takes into account the specific behavior of consumers related to occasions, benefits, user status and rates, loyalty status, attitude towards product, etc. A consumer’s preference may change depending on the kind of occasion. Products such as greeting cards, chocolate packs, etc are sold more during festival and occasion times. User status also reflects the needs and preferences of consumer.

Also Read

Use-Related Segmentation
Market Segmentation And Its Need
Market Segmentation And Its Advantages
Market Segmentation
Targeting Market Segment
Market Segmentation Process
Market Segmentation & Benefits

Benefits Of Market Segmentation

Market Segmentation enhances the market position of the business. In addition, it provides the business with a better understanding of consumer taste and preferences. It also offers the advantage of competitive edge.

A business specializing in one category will offer products/services with higher functionality and competitive prices. It results in customization of products/services according to the needs of the customers. Service delivery, manufacturing quality, productivity can be improved and expenditure can be reduced considerably.

By following the strategy of market segmentation, business can profit and prosper.

Related Posts

• 

  Importance Of Market Segmentation In Business
  Importance Of Market Segmentation In Business
• Market Positioning Tool: Practiced by Multinational
  Market Positioning Tool: Practiced by Multinational
• 

  Market Segmentation and Its Need, in Small Business
  Market Segmentation and Its Need, in Small Business
• 

  Demographic Segmentation in Marketing
  Demographic Segmentation in Marketing