What is Market Segmentation?

Market Segmentation is a process dividing a total market into groups, or segments consisting of people with relatively similar product needs. In dividing or segmenting markets, researchers typically look for common characteristics such as shared needs, common interests, similar lifestyles or even similar demographic profiles.

4 characteristics that build customer groups

Segmentation variables

If you are selling a product or service at first you need to establish wether or not there is potential to sell. Research is a great way to source information about your market as a result you will determine if your market is viable enough. Market segmentation is a customer information gathering process enabling you to build lists of customer groups based on similar characteristics. There are four human characteristics to analyse in a market, they include Demographic, Geographic, Psychographic and Behaviouristic. When you have established groups, you can begin implementing your marketing mix. If you would like to learn more about the marketing mix, click here.

Research tips

Market Segmentation research

Primary research is any and all information you collect yourself using techniques, such as interviews, questionnaires, surveys. On the contrary, secondary research, is information obtained using existing sources related to the industry or topic you are searching.

Benefits of segmentation

benefits of market segmentation

  • Segmentation will allow you to target customer groups who are interested in your type of product or service in addition this should enable you to focus your marketing efforts on more productive and profitable market segments.
  • Market Segmentation allows you to identify gaps in a market as a result giving you the jump on the opportunity to discover new customer groups.

Case study example

The key aspects discussed is a case study example of how customer grouping looks for a business. In addition you will see that I have clearly defined four customer groups for a fabricated, woman’s fitness studio.

Fitness gym segmentation groups

Segment 1

  • We have discovered ladies aged eighteen to twenty five who are more commonly described as social butterflies.

Segment 2

  • Also, busy woman aged thirty to sixty five whom work full-time and require gym time to wind down.

Segment 3

  • Individual woman who are hard-core gym junkies of all ages. These woman always seem to find time in the gym and are in great shape.

Segment 4

  • Then, single mums aged twenty five to thirty five who are juggling being a full-time mum and looking after self.

In summary, the market segmentation process has provided me with the information needed to capture a greater market share.

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2 Responses

  1. I hadnt considered much of this information related to segmentation at all but having heard it explained i can now replay all the telly ads in mind and chip each section of it out and how its aimed, often directly to a specific demographic living in a specific geographical region. Toyota for example, roughest terrain for the adventurest inside. Blah blah blah.

    Very clever

    1. Yes! great to hear Caleb, and continue to practice analysing ads, you will open yourself up to become aware of who the message is targeting. I’ll let you in on a little secret, I have this game I play at home, my partner Kim hates it, because each time I do it, I have the attitude as if I am so freeakin smart. The game is simple, whenever me and Kim are watching tv or a movie and a particular scene pops up with some sort of code advertising message, I quickly examine whats been said or seen and can relate the message to a certain target customer, brand or product that is being sold. I’ll even go as far to pause the movie and research immediately to prove my point. Seriously these guys are good at what they do, some movies are practically made to promote brands and products. Try it out next time you watch a movie or see an advert, the only catch is you will never watch a movie the same again lol.

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