Marketing Segmentation

The world is made up of many different consumers, each with their own set of needs and behaviors.
Segmentation seeks to complement consumers with products that satisfy their individual set of needs
and behavior patterns. As a result, this is known as a „segmenting‟. Think of a market as a chain of
connected and unique segments, each with its own profile. Companies can uncover new segments by researching
the hierarchy of attributes that consumers will consider when choosing a brand (Kotler).
Marketing segmentation strategies can be cultivated through an extensive choice of attributes found among
purchasers. One faction within the market may be recognized by gender, while another may be made up of
purchasers within a certain age category. Locality is another general element in market segmentation, along with
earning level and culture level. Therefore, although this causes some consumers who fall into more than one class,
marketing researchers generally allow for this singularity. As a function of the development of a particular set
within the larger consumer base, some businesses are forced to ask questions that start some realistic suggestions on
how to make a product or service more advantageous to consumers. This action may point to additional comparable
changes that do not affect the main product or service. Nevertheless, creating a few changes in the growth of a
product or service sends a transparent communication message to customers that the organization does pay attention
to purchasers.
Marketer Responsibilities
Organizations should know their current and future marketing size. According to Kotler & Armstrong
(1996), a market is a set of products or services, a market is a group of buyers, and in an industry, a group of sellers
that they serve. The most important task of an organization in marketing is to measure their current market demand,
which can be viewed in terms of total region or local market demand (Kotler & Armstrong). Total market demand
is not a fixed number, but a function of the marketing environment as well as the level and mix of industry
marketing (Kotler & Armstrong). An organization must know what their competitor is doing; they should notice
trends and respond to them. Marketing is an extensive field that incorporates areas of research, tactics and exchange
of ideas. Marketing plays a significant role for numerous organizations and improves value for the consumers and
develops consumer relationships. Because of the needs, preferences, and behaviors of segment, consumers are
similar but not identical (Kotler, 2001).
American Journal of Business Education – June 2011 Volume 4, Number 6
16 © 2011 The Clute Institute
The Reason For Segmenting Consumer Markets
There is no single way to segment a market. A marketer has to try different segmentation variables, alone
and in combination (Kotler & Armstrong, 1996). In order to be successful in today‟s global market, Organizations
will have the think innovatively, be willing to change and quickly adapt to the new ways of conducting business in
this twenty-first century. Nevertheless, a great deal of organization is now facing a larger number of small
consumers who do not think segmentation is worthwhile. However, these suppliers must look for broad classes of
consumers who adapt in their products or services needs and buying habits (Kotler & Armstrong). Previous studies
show that mass marketing creates the largest potential market at the lowest costs, which can lead to lower prices and
higher profit margins.
Diversity In Marketing Segmentation
Consumer diversity is growing quickly and organizations have prolonged how to make a distinction
between their products and services and that of the competition. This is where marketing segmentation plays a key
role. The United States will undergo a major transformation in its cultural and ethnic composition over the next 20
years. Economic factors will be the cause of these changes. Today‟s shrinking labor market is mostly comprised of
low to middle class citizens. This creates a slower-responding consumer market than if it was made up of upper
class workers. However, the organization that is willing to begin segmenting and targeting the right products and
services to match all of today‟s diverse cultures will create a competitive edge over their competitors.
Consumer market segmentation includes:
 Geographical
 Demographical
 Behavior
 Psychographic
Geographical Segmentation For Consumers
The geographic segmentation signifies a market divided by location. Geographic segmentation is based on
the belief that consumers who live in the same region share some related wants and needs and those wants and needs
could be very different from the consumers who are living in other regions of the world. For example, some
products and services have high demand in one region but not demanded in other regions. Despite its meaning,
geographic segmentation may differ from area to area. Geographic biases may depend on the different brands
available. In a number of areas, one brand may be very well liked and accepted but it may not be known by a
majority of the consumers.
Demographical Segmentation
Demographic segmentation consists of demographic factors such as age, ethnicity, nationality, occupation,
etc. Therefore, with these variables in mind, an organization can choose which consumer they will accommodate.
For example, an organization dealing with the younger generation will have to target the consumers between the
ages of 18 and 45 years, while an organization dealing the older generation will have to concentrate on consumers
between 46 and up. Demographic segmentation aids an organization in understanding its consumers and satisfying
their wants and needs. In today‟s global market, competition is driven by a strong competition causing demographic
marketing analysis to be a great advantage to any organization.
Behavior Segmentation
A variety of strategies for segmentation is available. However, previous studies show recommendations
that behavior-based strategies work well for most organizations. Segmentation based on consumer behavior
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variables normally included a sub-segment of consumer segmentation. Organizations often collect this data to see
the segment that best fits their consumer behavior. Behavioral segmentation can be the answer for a great deal of
organizations on where to lavish their next marketing dollar.
Psychographic Segmentation
Psychographic segmentation was developed by marketing researchers to correlate personality with brands.
Psychographics is classified as “the study of personality, values, attitudes, interests, and lifestyles.” Organizations
need to know their consumers‟ habits to effectively connect with them and for the consumer to identify the
organization‟s products or services. Psychographic segmentation acts on the psychology of the prospective
consumer and helps the merchant decide how he or she must manage their consumer that belongs to any specific
Business Segmentation includes:
 Geographical Segmentation
 Customer type
 Buyer Behavior
Geographical Segmentation For Business
Geographical segmentation is a marketing tactic in which prospective consumers are divided on the basis of
geographic units, such as cities, states, countries, etc. The critical intent of any organization is to make a profit. To
accomplish this goal, an ideal marketing tactic is necessary. Marketing is a broad concept, which entails various
actions, like studying the buyer‟s behavior, needs and personal preferences. Promoting and selling any product and
service using a variety of techniques is exceptionally important. It is also vital that marketers recognize the diversity
of each consumer and identifies their needs by the different segments of markets.
Customer Type
Customer type segmentation is used when an n organization need to influence a certain consumer type.
Instead of offering a services or products to everyone, organizations tailor each product and marketing tactic to a
specific target markets. By using customer type segmentation, companies are able to effectively allocate marketing
resources by targeting only the populations who are most likely to buy what they are selling.
Buyer Behavior
Buyer behavior is the study of how consumers purchase. Nonetheless, before an organization can start to
shape their consumers behavior, they must establish which market segment they will be concentrating on. One of
the most important factors in marketing is segmentation. Knowledge is developed due to buyer behavior analysis
and it is extremely advantageous when developing market positions, customer commitment, and pricing plans.
Consumers will make extra effort and become more engaged in their purchase if it is important to them, especially if
they have no prior knowledge of buying that particular product or service.