Market Segmentation- Concept And Its Levels

Buyers on the market are diverse in many ways. Their requirements, interests, and desires, as well as their location and attitudes toward purchases, may vary. The division of huge markets into smaller market segments, known as market segmentation, allows for the customization of any goods or services to the needs of the various market groups. Segmenting consumer markets, corporate markets, foreign markets, and requirements for effective segmentation are the four main themes that need to be covered.

Segmenting Consumer Markets

Since there isn't just one way to segment a market, marketers make use of important factors like geographic, demographic, psychographic, and behavioral factors.

Geographical Segmentation: Geographic segmentation entails breaking down the market into several geographical units, such as countries, states, cities, neighborhoods, or even religions. A business will choose whether to operate in one or several locations. For places with significant Hispanic populations, Kraft had produced Post's Fiesta fruity pebbles cereal, while Coca-Cola had produced four ready-to-drink canned coffees for the Japanese market.

Demographic Segmentation: Demographic Segmentation is related to the division of the market into a group based on variables such as age, gender, family, life cycle, income, occupation etc.

• Age and Life Cycle Segmentation: As consumer needs and wants changes with age so the company uses age and life cycle segmentation offering different products for different age groups. For example, Procter and Gambles sell Crest Spin brushes featuring favorite children's character.
• Gender Segmentation: It involves in the division of a market into different groups based on gender. It has long been used in clothing, cosmetics, magazines etc. For example :L’oreal Paris now offers men's expert skin care protection.
• Income Segmentation: If the market is divided into various market groups then it is called Income segmentation. This strategy has been used by the marketers of products, and services such as clothing, automobiles, cosmetics, financial services and travel. For example Dollar general, Family Dollar store chains successfully provide product and services to lower and middle-income groups.

Psychographic Segmentation: It is the process of dividing the markets into different groups on social class, lifestyle, or personality characteristics. Person with the same demography may have different psychographic measures.

Behavioral Segmentation: Behavioral Segmentation divides the buyers into various groups which are based on their knowledge, attitudes, uses, or responses to a product. Many marketers also believe that this variable is the best starting point for building market segments. For example, Eggs mostly are eaten during breakfast but American Egg Board with its “incredible, edible egg “ theme advertises the eating the eggs at all time of the day.

Levels of Marketing Segmentation

Mass Marketing: Target marketing is not always employed by businesses. Major consumer goods corporations actually adhered steadfastly to the idea of mass marketing, which entails mass manufacture, distribution, and promotion of the same product to all consumers in the same manner. Similar to this, Coca-Cola once made just one beverage for the whole market, expecting that it would be popular with everyone.

Segment Marketin: A business that uses segment marketing isolates the large market segments that make up the market and then modifies its offers to better meet the demands of one or more segments. Comparing segment marketing to mass marketing, there are various benefits. By focusing primarily on the customers it can most effectively and profitably serve, the organization is able to sell its goods and services, communications, and channel initiatives. By fine-tuning its products, services, and prices to the requirements of properly defined categories, the corporation could also market more successfully. If the corporation concentrates on this market sector, it might also face fewer rivals.

Niche Marketing: Market segments are typically sizable, recognizable subsets of a market. buyers of utility vehicles, luxury vehicles, economy vehicles, and performance vehicles, for instance. These market segments' subgroups are the focus of niche marketing. A niche is a more specifically defined group, typically defined by a group of people who exhibit distinctive behavior and may be looking for a unique combination of benefits. While niches are smaller and typically only draw one or two competitors, segments are larger and typically draw multiple competitors. Customers of niche marketers are prepared to pay a premium since they are knowledgeable about their niche's needs.

Micro marketing: In order to cater to the needs of various market segments, segment and niche marketers customize their marketing initiatives and products. However, they don't tailor their offerings to each specific buyer at the same time. Thus, between the extremes of mass marketing and micromarketing, niche marketing and segment marketing lie. Micromarketing is the process of tailoring items to the preferences of particular people and places. Local marketing is a part of micromarketing (Local marketing includes tailoring brands and promotions to the needs and wants of local consumer groups— neighborhoods, cities, and even specific stores).

Reference

Kotler, P., & Armstrong, G. (2013). Principles of Marketing. Chennai: Pearson India Education Services Pvt Ltd.

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