In marketing, market segmentation is basically the procedure of separating a broad consumer/business segment from the rest of the market based on some kind of defining characteristic, usually based on demographics. Market segments can be broken down based on things like product, brand, target audience, price, geographical location, company size, and many more. However, it’s often difficult to know where to start once you’ve defined your market segmentation criteria.
- How do you know what kinds of products to sell in a specific segment?
- How can you know which kinds of businesses should be included in a certain segment?
Market segmentation starts with identifying what types of characteristics are common among consumers.
Let’s use four examples to get started. The first is psychographics, also known as behavioral traits. Depending on how psychographic you define a person, their characteristics might include socialization, attitude, personality, values, and many other factors. Common traits that we can categorize into psychographics are: age, race, gender, educational level, religion, place of birth, and many more.
Geographic location segmentation.
Location is important because it allows marketers to know what kinds of products or services they should sell best in different locations. This type of research method for pinpointing the locations where potential consumers or clients can be found is called local observation research method. For example, if a marketer wants to sell skincare products in Hawaii, then they should conduct local observation research by surveying people in the places where these products are in high demand.
Data on a county size.
Most marketers use county size as one of the most effective tools for market segmentation because counties tend to have a larger amount of various products and services. In order to segment counties based on county size, the marketer needs to determine what percent of the population lives in each county and then determine its overall market density.
Behavioral marketing segmentation.
The main thing that behavioral market segmentation focuses on is a person’s behavior. The reason that this is so effective is that a person’s behavior is unique to every single person. Marketers therefore use behavioral questionnaires to find out what kinds of things their customers are interested in or what types of things they’d like to buy. This is a more effective way to target customers because it is based solely on real-life customer questions.
Using data on demographics.
Because there is such variation across demographics, market segmentation allows marketers to identify which demographics are more likely to respond to a certain product. In addition to being able to target certain demographics, market segmentation allows marketers to tailor their messaging to match demographics.
E-commerce businesses make their product more appealing to a specific group of people.
The most effective marketing messages are those that are tailored to appeal to a specific group. This makes it more likely that a consumer will purchase a product from your site, which increases the likelihood that you will earn an e-commerce business a significant profit. Market segmentation allows you to take steps to ensure that your messages are appealing to as many consumers as possible.
In this article we discussed 4 types of market segmentation that marketers typically use. These four categories include: demographic, behavioral, geographical, and e-commerce. You can easily apply these techniques to your own business and increase your e-commerce business. Make sure that you follow up with your customers and do everything that you can to make your site more appealing to your demographic and behavioral information.