Dividing Your Market in to Segments


Market segments

If you are trying to start an effective marketing campaign for your small business, it can be very helpful to divide your market up into segments first. Segmentation involves placing your customers and potential customers into similar clusters based on features they have in common. This allows your marketing to be much more specific and focussed.

There are many ways in which you might want to segment your market. One of the most common form of segmentation is based on demographics. This usually focuses on rather broad variables like age, education and gender. Many companies use this form of segmentation to build an entire business model, for example those that sell holidays catering to the elderly or car insurance with lower premiums exclusively for female drivers.

It is also possible to segment a market based on geography. People that live in a city have different requirements to those in the countryside. Often people in remote locations will only travel to the shops a few times every month so their needs and purchases are obviously going to be different to those of city shoppers.

Psychographic segmentation is a method of dividing consumers into social groups. It is also sometimes referred to as behavioural segmentation, because it identifies ways in which social behaviour affects purchase decisions. Marketers use terms such as Yuppies (young, upwardly mobile professionals) and Jollies (jet-setting oldies with a lot of loot) to describe the various groups.

Another way of segmenting is known as benefit segmentation. This is a way of recognising that different people often receive quite different benefits from exactly the same product or service. Some people are attracted to the cost of a product while others may purchase the same product purely due to its convenience. You need to be aware that your product may have an appeal to multiple customer groups.

Most products and services are marketed at multiple segments of the market and based on more than one variable. Often segmentation is actually most useful for identifying the groups of people that your marketing campaigns will not be targeting!

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