Market segmentation

What is market segmentation?

Market segmentation is known as the action of dividing the market into specific groups, according to characteristics and needs. The goal of segmentation is to identify a target audience for more effective marketing.

In other words, Market segmentation is the process of classifying the market into smaller and more homogeneous groups, in order to carry out more effective marketing.

Market segmentation variables

In order to segment a market into certain homogeneous groups, the following variables are used:

Market segmentation variables.

Geographic variables

These take into account the climate, country, city and region where the consumers are. The size of the place where they live is also considered.

Demographic variables

These ttake consumer demographics into account, such as educational level, religion, nationality, culture, race, family size, age, sexual orientation, gender, profession, income level, among others.

Behavioral variables

Behavioral variables are related to consumer behavior and with the benefits that it obtains when buying a product or service. For example, the expectations you have when buying.

Psychographic variables

These analyze attitudes, lifestyle, values, interests, and personality of the client or consumer, in order to satisfy their personal tastes.

Types of market segmentation

We can classify market segmentation into the following groups:

• Socioeconomic: those who are divided by lifestyle or income.
• Economic: divided by the type or amount of the consumer's income.
• Business: divided by the type of company, its size and development.
• Behavioral: takes into account the behaviors, benefits and attitude that the consumer has towards the product.
• Demographic: It is divided by gender, life cycle and age.
• Geographical: divided into cities, neighborhoods, regions or countries.
• Psychographic: It is divided according to the preferences, personalities, lifestyles and social class of the consumers.

Examples of market segmentation

Here are some examples to better understand market segmentation and how companies use it:

Case 1

A company that makes tools for nature-loving adventurers needs to run an advertising campaign. For this, the marketers of the company should focus their merchandise towards these fans and their behavioral variables, through market segmentation.

For advertising to be effective, it should focus on this segmented market, which corresponds to the characteristics of the adventurers, and carry out campaigns in media related to the subject, such as an adventure magazine.

Case 2

A hygiene products company launches a product especially for women, therefore, you will be segmenting your market with a demographic variable, gender.

Therefore, the company in question will have to adapt its marketing strategies to such market segmentation.

Case 3

One of the most present forms of segmentation in recent times is the social media ads. These allow segmenting an audience according to different variables, such as gender, age, region, interests, etc.

Importance of market segmentation

Market segmentation is essential for permanent efficiency and benefits, since with this it is possible to focus the investment towards the attention of a small group, in an efficient and objective way to the product.

What's more, allows sales to be more effective, since you have the opportunity to design and improve campaigns and strategies, according to the consumer or customer. All this makes market segmentation a vital process for the optimal functioning of an organization's marketing.