Question

We’ve learned that there are several ways to create market segments for our business. Which type do you think is easiest to use? Or does it depend on the product under consideration? Explain and give an example. Minimum 150 words (Marketing Class)

Answer 1

Market Segmentation is a marketing strategy wherein an entire product market is divided into smaller subsets of consumers with common interests and preferences.

For example, a ‘mayonnaise’ market can be sub-categorised into restaurants and individuals. A toothbrush market can be sub-categorised based on gender (males/females) and further into age brackets (1-3 years, 4-10 years, 10 and above), which will enable the company ensure right degree of softness in bristles for each group of customers and ways of advertising among them.

Market segmentation can be based on following variables :-

1. Geographic : Geographically a consumer market can be categorized based on regions (country, state), population density (urban, sub-urban, rural), city size or climate.
2. Demographic : Some of the demographic variables are age, gender, occupation , religion, family size, ethnic group, nationality etc .
3. Psychographic : Psychographic variables include interests, opinions, activities, attitudes and values.
4. Behavioral : Some of the behavioral factors include brand loyalty, price consciousness, occasions/festivals, user status (first-time or regular) etc.

Market Segmentation is most appropriately done on the basis of the product type, its application and target consumer market size. Having said that, demographic segmentation seems to be the most important variable. It is highly essential for a company to identify the needs and likes of customers based on their gender, age, etc before planning on the correct marketing and advertisement strategy.

Some of the characteristics of a market segment are :-

1. Measurable : A company should be able to tell how many potential customers there are under a particular segment.
2. Accessible : The identified market segment should be accessible through sales force, transportation, telecom and internet.
3. Substantial : The identified market segment should be large enough to be profitable.
4. Durable : The identified market segment should not be prone to change in near future so as to enable the company enjoy benefits of the marketing and advertising for a reasonable time period.