If you want your message to be heard, it must reach the appropriate individuals at the proper time and place. Getting your products or services to resonate with your target audience is at the heart of marketing as a business owner.
However, before you begin marketing your company, you must first establish who you will be targeting. Market segmentation is the first step in determining who your brand should contact and appeal to.
Market segmentation is the process of breaking a targeted audience into subgroups based on shared characteristics such as age, gender, or region and priorities, values, and behaviour.
This is an essential component of developing a marketing strategy since it allows you to determine consumer purchase behaviours correctly. Segmenting your market can assist you in understanding what personal, cultural, economic, or societal elements may influence clients’ interactions with your services.
To segment a consumer market, a wide variety of variables are used. The following are the most typical market segmentation bases:
- Traditional: Geographic, Demographic
- Modern: Psychographic, Behaviouristic
Geographic division
Geographic location is one of the most basic strategies of market segmentation. People in one country region have different shopping and consumption habits than those in other regions. Lifestyle products, for example, sell very well in major cities such as Mumbai, Delhi, Kolkata, and Chennai but not in small villages. People’s banking demands in rural locations differ from those in urban areas. Even within a city, a bank branch in the northern section of town may attract more customers than a branch in the city’s eastern portion.
Demographic Classification
Demographic factors like age, occupation, education, gender, and income are frequently utilised for market segmentation.
- Age range: teenagers, adults, and retirees.
- Gender: Male and female.
- Agriculture and cottage industries
- Income Level: Above Rs. 1 lakh per year, Rs. 50,000 to Rs. 1 lakh per year, Rs. 25,000 to Rs. 50,000 per year, i.e. higher, middle, and lower.
- Life Cycle of Family: Young single, young married with no children, young married youngest kid under six, young married youngest child beyond six, older married with children, older married with no children under eighteen, older single, and so on.
- Psychographic Segmentation: This strategy divides consumers into market categories based on their psychological make-up, i.e., personality, attitude, and lifestyle. People might be characterised as traditionalists or achievers based on their attitude toward life.
- Profession: Agriculture, industry, trade, students, service sector, households, institutions.
- Industrial sector: significant, minor, and insignificant.
- Trade: wholesalers, retailers, and exporters
- Professional and non-professional services
- Institutions: Educational, religious, and social organisations.
Psychological Division
According to Rogers, there are five types of consumer personalities based on how they accept new products:
- Innovators: They are cosmopolitans who are eager to try out new ideas. They are daring and willing to risk a negative experience with a new product now and then.
- Early Adopters: These influential persons check out innovations before the general public.
- Early Majority: This group takes their time before embracing a new product. Its members play a vital role in legitimising an innovation, although they are rarely leaders.
- Late Majority: This group is cautious and only adopts new ideas after general acceptance of an innovation.
- Laggards: They are persons who live in the past. They are wary of change and innovation. When they embrace a product, it may have already been replaced by a new one.
Understanding customer psychographics allows marketers to choose better potential markets and match product image with the type of consumer who will use it. Women who frequently use bank credit cards, for example, are thought to live an active lifestyle and be concerned about their beauty. They are generally liberated and open to new experiences.
However, psychographic categorisation may oversimplify consumer personalities and purchasing behaviour. Because so many factors influence consumers, an early adopter of one product may be a laggard for another, and vice versa.
Behavioural Classification
Consumers are divided into market segments based on their knowledge, attitude, and usage of actual items or product qualities rather than their knowledge, philosophy, and product attributes.
Any of the variables listed below could be utilised for this purpose:
- Purchase Occasion: Buyers can be distinguished based on when they use a product or service. Air travellers, for example, may fly for business or pleasure. As a result, one airline may portray itself as a business flyer, while another may attract vacationers.
- Benefits Sought: The primary benefit sought in a product is used to categorise consumers. Benefits include high quality, low cost, good taste, quickness, and sex appeal. Some plane travellers, for example, choose an economy class (lower price), while others prefer executive class (status and comfort).
- User Status: Prospective customers can be categorised as regular, infrequent, or non-users. Marketers can create new products or new uses for old ones by targeting one of these categories.
Volume Division
Light, medium, and heavy users of a product are categorised. In some circumstances, 80% of the product may be sold to only 20% of the group. By identifying similar qualities among heavy users, marketers can decide on product features and promotional techniques.
Product Space Classification
Buyers are asked to compare existing brands based on perceived resemblance and in comparison to their ideal brands. To begin, the analyst deduces the latent traits that customers use to perceive the brand. The purchasers are then divided into groups, each with their ideal brand. Each group’s distinguishing characteristics are determined.
Benefits Division
Consumer behaviour is more influenced by the benefit sought in a product/service than by demographic characteristics. Each market category is distinguished by the primary benefits it seeks. Most consumers want as many advantages as possible. However, the relative relevance of individual benefits varies from group to group. For example, some toothpaste users prioritise freshness, while others prioritise taste or tooth brightness.
Segmenting your consumers will give you a deeper understanding of their demands and needs proving to be very helpful. It demonstrates how distinct groups of consumers are more likely than others to seek out or purchase a product.
Conclusion
Marketing research can help your B2B company become more self-aware, market-aware, and prepared for change. Don’t be concerned if you’ve never conducted this type of research before. A qualified research partner can do the heavy lifting and provide a more nuanced interpretation of the results — results on which you should be able to act immediately.
Marketing research is a powerful but under-utilised tool and Maction can help you do it. Whether you want to know how to re-establish your company’s momentum, what’s going on in the market, why your top competitor is winning all the business, or how to maintain your competitive edge, the answers are available. All you need is the will and the means to extract them.
