Market segmentation is a technique for using market research in order to learn all you can about your customers. It is a process of dividing target market into relatively more homogenous groups (segments) based on certain parameters like demographics, geographics, psychographics, or behavioral factors. Segmentation allows us to develop a marketing strategy that fit a relatively homogenous part of the total market. Different market segments require different marketing strategies e.g. different offers, prices, promotion, distribution, etc.
4 Types of Market Segmentation:
Demographic segmentation:It creates groups of people based on their age, gender, religion, location or occupation, education level, family size, ethnicity, income, and more
Psychographic segmentation:The consumer is segmented as per their attitudes, lifestyles, interests, social class, personality characteristics, political leanings or values.
Behavioral segmentation: Behavioral segmentation divides customers based on what they do, using insights derived from customers’ actions. It focuses on specific reactions and the ways customers go through their decision making and buying processes. e.g., brand loyalty, frequency of purchase, sensitivity toward price, levels of desired quality.
Geographic segmentation: Geographic segmentation targets customers based on a predefined geographic border e.g., nations, states, regions, counties, cities, neighborhoods, climates
