Consumers are not the same for every market and product, and the marketers long realize this. There are different categories and location, age, gender, attitudes, needs, and any social factor.
According to that, some people categorize the segmentation as science and some as arts and place them in groups. Sellers use the concept of segmentation to sell their products and even their services.
What is a Target Market?
A target market involves breaking a market into segments and representing a group of potential customers ( consumers or organizations) who are most likely to buy a company’s products or services.
Suppose we say that sellers or businesses sell their products to every consumer; that would be totally wrong because there are hardly some products consumed by all consumers’ categories. So, on a realistic base, products have their consumer classes as well, and those classes can be varied from each other in terms of age, income, gender, and needs.
If an Iranian company wants to sell their handmade fine carpets, only a few people with a good income, and probably those who own the houses, will buy the carpets. Not all classes will take the initiative.
For this reason, companies and sellers do their complete research to identify what their target market is and which class of consumers will buy their product and why they will be the product. The target indicates their aim, and the market says the consumers. There are several major classes of the target markets.
Examples of target markets are:
- Male who drives a car
- The older woman who own their own homes
- Law firms in the USA
- Single people in the city
How the Target Market was Segmented In Business?
Target Market can be segmented into seven steps:
- Step 1: Review of Audience Information.
- Step 2: Decide Whether to Segment.
- Step 3: Determine the Segmentation Criteria.
- Step 4: Segment Audiences
- Step 5: Decide which Segments to Target.
- Step 6: Assess the Proposed Segments.
- Step 7: Develop Audience Profiles.
Why do Target Markets usually resemble Big Lake?
“Target market is a big lake,” and this is so-called as this because the big lake has me of the species in it the more fish. Since the catcher wants to catch the specific fish, he will throw the special lure according to its size and design to catch it. Similarly, this is what happens when companies want to have their target market; they throw the lure ( product) according to the consumer class’s demands and needs. Only then will they respond to the advertisement, and the other might be indifferent or repelled by it.
Why is market segmentation an important variable in strategy implementation
Market segmentation allows a small firm to compete successfully with a large firm, allows a firm to operate with limited resources, and market segmentation decisions directly affect marketing mix variables.
It is essential in the business market that your product’s message (advertisement) to your consumers reach more effectively and efficiently. To shape the message, you need to know about your customer’s needs and demands or values. This will help a lot more than to advertise.
For example, Mcdonalds is the name of the burger-making restaurant, and it’s super in its marketing because of the marketing strategies they adopt. Mcdonald’s sells its vegetarian burgers in India since the people’s demand was more to veg section. The same Mcdonald’s sells its burger with seafood patties in Bangladesh since people like to eat fish more.
Market segmentation works as dividing a large group of people into different groups of customers, with each has the same needs and demands.
Four Types of Segmentation
There are many purposes behind the market segmentation. It helps sort out the large group of the market divided into smaller categories, each with specific characteristics and special behaviors. As marketers traditionally rely on and believe in the following four segmentation strategies:
- Demographic segmentation
- Behavioral segmentation
- Geographic segmentation
- Psychographic segmentation
What is Demographic Segmentation?
Now demographic means to go with the most basic criteria in the start. Demographics segmentation identifies potential customers by criteria such as age, gender, income, race, education, religion, social class and nationality, and family size. Demographic Segmentation Explanation:
Age and life-cycle segmentation in this category, the consumer is identified as a potential customer based on their age. Let us say if there is a couple in their 50s. They tend to have their interests according to their age, and they won’t be interested in buying diapers anymore. So this example defines the market segment of demography. You need to target your market according to their needs, and in these segments, you will come to know about their needs and demands by their age.
Young ladies would be more interested in buying fashionable and fancy clothes rather than buying dull colors.
Gender segmentation This market segment defines the needs and demands of the consumer based upon their gender. For example, m.a.c is not popular among men since it is a cosmetics brand. This example goes well with other cosmetic brands as well. There is a huge difference in the choices of both genders. After age, gender defines the buying behavior of the consumer well.
Income and social class segmentation Income can be a fair market segment to define the potential consumer’s buying behavior since a BMW is not for the social class under the labor. There are many examples of it, but income is not treated as a strong market segment to define the target market since many people prioritize their money differently. Not all the middle-income earners are well reserved and save their money, and not all the high-income earners spend their money.
What is Geographic Segmentation Practical Examples
The geographic segment describes the target market as it decides them into different subgroups based on the area they are living in. So this can be a major impact on the target market since the area and the surroundings have a deep impact on individuals, and it can shape the decisions and buying behavior of the people as well.
These differences may be due to cultural or political or maybe the peer impact on people that can easily alter the buying behaviors. For example, in China, it is common to give gifts to your visitors. In most Asian countries, people like to have tea more often. Elsewhere, differences can be varied like political, cultural, and maybe due to climate changes.
The geographic segment of the market nearly defines the buying behavior and social class of the society. Still, if we only go with geographic segmentation, that won’t be as effective and would be assumed as a false assumption in business – so people around who are sellers in the market try to comprehend the complete research with the combination of geographic and demographic segmentation, to study the customers buying behavior.
What is Behavioural Segmentation Examples?
The behavioral segment in the market defines the buying behavior pf the people or group of people, when they are trying to buy something new in the trend lets, say the Apple releases its new iPhone and want to see if in some of the specific area people would be interested in buying or not. This will tell a lot about people’s class and their behavior towards buying a new thing or to buy something new, or maybe they are more interested in buying those of the products that are gone mainstream.
Marketers would know about their marketing strategies, and they would establish their brands according to them. Somehow behavior toward a product is fairly tricky to pin down; many marketers focus on the following variables as the best starting points:
Behavioral Segmentation Occasions: Timings play their role a bit and impact the people’s buying behavior around them. This is so as like, people buy jackets mostly in winters and swimsuits in summers. People buy mostly in the end seasons where they can get the things at a discount price, and most of them buy in the year-end where they can buy with their bonus money.
So buying do have its timings in people’s life. This is to be considered as one of the segments to know about the target market.
Behavioral Segmentation Benefits: Benefit segmentation identifies what people look for in the products they buy.
Behavioral Segmentation Brand loyalty in customers: brand loyalty is a factor in buying behavior. Many people are extremely loyal to a specific brand and buy all those products that are newly released by that brand, and others and loyal to two-three brands at a time and finds their product alternatively. The remaining class is not loyal and prefers other factors such as price and value and their need to buy.
Psychographic Segmentation Examples
Psychographic segmentation allows marketers to understand the motivation behind a buying decision, such as personality profiles and lifestyle profiles.
Psychographic segmentation focuses on such questions as:
- Does this consumer is optimistic?
- Is the customer Extrovert or an introvert?
- IS the customer Politically active or not?
- What are the Interests and hobbies of customers?
As the psychographic segmentation is fairly a difficult one for the marketer to apply on different markets. In this, some of the big companies go for this research on the market to find their target market, and they are more actively seeking the answers to these questions as explained above. These questions prove how your potential customer would be attracted to your product based on their personality concerns.
Since these answers are not open and one has to go through many research and surveying to achieve the actual data and not the small data work for the big market, getting the big data is the ultimate goal. There are many types of research to get the data, and some are based on the assumptions that people who use Facebook and the type of post they upload define more about their personalities. The pages they liked and the comments they write says a lot.
This type of research and getting data through such means are more prone to errors and less effective. The data collection to find the potential target market should be more authentic to use for business.