Market Segmentation

2 Pages 449 Words

Market segmentation is briefley the process of breaking down a larger target market into smaller segments with specific characteristics. Each group requires different promotional strategies and marketing mixes because each group has different wants and needs. Segmentation will help us customize our product, such as advertising or to reach and meet the specific needs of a narrowly defined customer group.
Before deciding to fund a market research we must be sure that the market is,
Big enough:
Market must be large enough for segmentation. We can not split a market that is already very small.
Different:
Differences must exist between members of the market and these differences must be measurable with data collection methods.
Reachable:
Each segment must be reachable through one or more media. You must be able to get your message in front of the right market segments for it to be effective. If one-eyed, green aliens are your best marketing opportunity, make certain there is a magazine, cable program or some other medium that targets these people (or be prepared to create one).
Profitable:
The expected profits from expanding your markets and more effectively reaching buyer segments must exceed the costs of developing multiple marketing programs, re-designing existing products or creating new products to reach those segments.

And we should mostly look for differences in the 5 categories which are,
Demographics:
Refers to age, sex, income, education, race, martial status, size of household, geographic location, size of city, and profession.
Psychographics:
Refers to personality and emotionally based behavior linked to purchase choices; for example, whether customers are risk-takers or risk-avoiders, impulsive buyers, etc.
Lifestyle:
Refers to the collective choice of hobbies, recreational pursuits, entertainment, vacations, and other non-work time hobbies
Belief and value systems:
Includes religious, political, ...