Market segmentation

Market segmentation divides the market into subgroups of individuals who share
similar needs, wants, and characteristics.
It is the marketer's goal to identify the appropriate subgroups of consumers. There
are four ways of segmenting consumers

Demographic segmentation
This is one of the most widely used segmentation methods. Demographic
segmentation divides consumers into groups based on characteristics such as:
 Age.
 Sex.
 Income.
 Family size.
 Occupation, etc.

Geographic segmentation
This divides the market based on geographical aspects. Geographic segmentation
can be a helpful tool for marketers, as certain customers from different parts of a
country could have different wants and needs. Geographic segments include:
 Country.
 City.
 Neighbourhood.
 Climate.

Psychographic segmentation
This looks at the intrinsic traits of the target consumer.
 Style.
 Values.
 Personality traits.

Behavioural segmentation
This breaks down the market into subgroups based on consumers' behaviour when
making purchase decisions. It can be based on:
 Occasions.
 User status.
 Usage rate.
  Loyalty.

Targeting

 Targeting involves deciding which customer segment or market the firm

should be aiming at.
 Once a firm identifies all market segments, it must determine which ones to
target and how many.
 This strategy aims to identify small, well-defined target groups.

Example:
Imagine you are working as a marketing manager for a clothing retailer. Instead of
deciding to target all women, you would specify that you want to target women
between the ages of 25-30 who purchase new clothes at least once every two
weeks. To find the appropriate target market, you need to evaluate the market
segment based on its attractiveness, and whether the firm has the resources and
capabilities to do this effectively.

Positioning

Finally, the company has to position its product in the market.

Positioning involves determining where your brand or product stands affecting
others in the market.
Positioning is a vital part of marketing strategy, as it influences how customers
perceive your product offering. It is directly related to value proposition.