Market Segmentation?

It is the process of dividing the target market into smaller groups.

These segments enable companies to get a better understanding of
their target audience. They can be segmented on similar
characteristics such as interests, needs, location, demographics,
priorities, and personality traits. This exercise helps brands create
marketing strategies, advertising, and sales, and further optimise
their products.

Benefits of Market Segmentation

 Efficient targeted digital advertising: Allows companies to

create better-target advertising according to age, interests,
location, and spending patterns, among other things.

 Creating clear and specific marketing messages: Marketing

segmentation helps companies understand the needs and
expectations of their targeted group; this lets them
communicate directly with their target audience.
 Effective marketing efforts: Understanding the target audience
can help companies develop marketing strategies that clients
will be more responsive to.
 Attracting potential customers: Direct marketing messages
enable companies to reach out to the right clientele and
potentially convert them into customers.
 Increasing profits: The process can save time, resources, and
money in marketing campaigns, and ultimately enhance a
business’s profitability.
 Differentiate from the competition: Clear marketing messages
can make the brand stand out in the market.
 Increasing brand loyalty: Understanding the target customers
can help companies connect with their clients and build brand
loyalty.
Examples of Market Segmentation
 Sports brand: Sports brands can be segmented based on
sportsmen, sportswomen, athletes, and gym lovers.
 OTT streaming service: OTT streaming services can
segment their market based on child versus adult content

Bases for Segmenting Consumer Market

Major bases for segmenting the consumer market include

geographic, demographic, psychographic, and behavioural
variables.

1. Geographic Segmentation: Geographic segmentation calls

for dividing the whole consumer market into different
geographical units such as nations, regions, states, cities, etc.
A company may want to target one or more geographical
units but should pay attention to the differences in needs and
wants of different units. Various factors, like geographical
conditions, cultural influence, etc., help identify the various
geographic segmentations.

2. Demographic Segmentation: Demographic segmentation

involves segmenting the market according to various basic
yet important factors. Factors like age, gender, income, etc.,
determine the segments under demographic segmentation.

3. Psychographic Segmentation: This type of segmentation

includes dividing the whole consumer market into various
segments based on personality and lifestyle. Personality
refers to the combination of various characteristics like traits,
habits, attitudes, etc. Lifestyle includes how an individual lives
and spends their money and time.
4. Behavioural Segmentation: Behavioural Segmentation
involves segmenting the market into various segments based
on how an individual reacts in a certain situation or to a
particular product/service.

Basis Examples

Geographic McDonald’s offers a range of vegetarian options

Segmentation in India, including the McAloo Tikki Burger.

Coca-Cola segments its market according to

Demographic various demographic factors and formed
Segmentation segments like the youth market and health-
conscious adults.

Apple’s marketing and product design are

Psychographic known for appealing to customers who value
Segmentation innovation and creativity.

Behavioural Amazon uses behavioural data to personalise

Segmentation product recommendations for its customers.