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Market segmentation divides a group of potential customers into specific groups and segments to enhance the effectiveness of marketing campaigns. Aspects like segmentation criteria and segment prioritisation make the topic more complicated, because of which students of marketing often find it hard to write their assignments. If you are facing the same issue, let us know. Our professional writers will help you deal with your academic woes.

4 Types of Market Segmentation with Practical Examples

Market segmentation is the process of categorizing potential customers into segments or groups based on similar interests, needs and demands. The four types of market segmentation implemented by marketing managers are:

Demographic segmentation

The demographic segmentation depends on factors like age, gender, family size, nationality, religion, race, occupation and income.

Demographic segmentation is mostly implemented by the companies that function in the automobile industry. Maruti has low price bracket as it manufactures automobile for people with moderate income. BMW and Audi have high price bracket as they target the high-end buyers.

Behavioural segmentation

This segmentation divides the target customers on the basis of decision making pattern and usage. For instance, sports enthusiasts will prefer Lifebuoy whereas young people will use Dove.

Marketing Managers of Smartphone companies adopt this segmentation strategy. While Blackberry was initially launched for high-end businessmen, Samsung was launched for people who enjoy free apps.

Psychographic segmentation

Psychographic segmentation is quite similar to behavioural segmentation. But, it also takes the psychological aspects of the customer’s buying pattern into account.

The Marketing Mangers of Zara follow this strategy to attract clients who opt for latest trends in clothing. While those of Arrow target high-end office clothing by solely focusing on their customer’s lifestyle.

Geographic segmentation

This strategy is developed by Marketing Managers on the basis of the geographic location of the customers. For example, people living in municipal areas might need UV based purifiers. But, people living in non-municipal areas might need RO water purifier.

Marketing Managers of cold countries target the marketing of air heaters whereas those of hot countries target air coolers. In most of the cases, the buying pattern changes with a change in the location.

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Why Marketing Managers should focus on Market Segmentation?

The debate against market segmentation has been going on for a long time. Despite the downsides, this strategy is fairly important to Marketing Managers because of the factors listed below:

Customer Needs - At the initial phase, every company needs to study the needs of their target customers. Market segmentation helps the Marketing Team to refine their research and build a product as per the customer’s needs.
Maximum Profit Potential - Targeting and market positioning allows marketing managers to gain an insight into the requirements of the customers. It also encourages several companies to develop better products to maximise the profit.
Customer retention - Companies can establish a life-long relationship with their customers through market segmentation. The resources of the company can be structured to focus on personalization and produce the right product for the right customer.

Marketing Managers segment a market to cater to the diverse needs of a wide base of customers. It enables the companies to develop products and services that would be received well by the consumers living in a specific area. This improves the revenue and increases the company’s share value in the market.

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