Market Segmentation

Market segmentation is the process of division of a larger market or consumer base of already established or potential customers into smaller, sub-groups of consumers known as segments. These segments consist of customers that share a certain common characteristic or trait, ranging from common needs and interests, through similar lifestyles to even shared physical traits. The underlying purpose behind segmentation is to identify shared characteristics within the segmented groups, which in turn allows marketers to optimize their products in order to suit the likes of a selected segmented group. As stated by Gary Armstrong, “Through market segmentation, companies divide large, heterogeneous markets into smaller segments that can be reached more efficiently and effectively with products and services that match their unique needs”[1].

Table 1 Adapted from Jobber and Chadwick, 2013[2]

4 Main Bases of Segmentation
Name:	Example:	Focuses on:
Geographic:	“Customers within 15 miles of Manchester”	Physical location/region, Urban/Rural differentiation, ACORN Classification
Demographic:	“Young, upwardly-mobile prosperous professionals (YUPPY)”	Quantifiable population characteristics (age, gender, income, education, socio-economic status, educational attainment etc.)
Behavioural	“Tech-savvy end users, wanting specifically optimized items to their needs”	Consumption or usage behaviours (Needs-based, benefit-based, usage occasion, purchase frequency etc.)
Psychographic	“Health-driven customers, who prefer to buy organic products”	Lifestyle, social or personality characteristics (tends to include basic demographic descriptors)

 

Market segmentation is an important and widely used tool which allows marketers to categorize sub-groups of customers, and craft products that will suit their particular wants and needs. This leads to increased customer satisfaction, revenue stream and brand awareness.

---

CommsCities 

Digital and Social Media Marketing Communications Management 2016 – 2017 #DSMMCM1617

Benita Birak	14040859
Emily Waters	14032920
Jelani Virgo	14016876
Sydney-Marie Subritzky-Baggaley	13133794
Wiktor Paul	14043936