2. Market Segmentation
Market segmentation is the process of dividing up mass markets into groups with similar needs and
wants.
Market segmentation is a process of dividing a heterogeneous market into relatively more
homogenous segments based on certain parameters like geographic, demographic, psychographic,
and behavioural.
It is the activity of dividing a broad consumer or business market, normally consisting of existing
and potential customers, into sub-groups of consumers (known as segments) based on some type
of shared characteristics.
3. Market
Segment
ation
Also researchers typically look for
common characteristics such as shared
needs, common interests,
similar lifestyles, or even
similar demographic profiles.
Market segmentation allow marketers to
get to know their customers, identify
what is needed in their market segment,
and determine how they can best meet
those needs with their product or
service.
4. Market
Segment
ation
• Market segmentation depends on
two levels − the strategic level and
the tactical level.
• At a strategic level, it has a direct
link with the decisions on
positioning.
• At a tactical level, it relates with the
decision of which consumer groups
are to be targeted.
6. Benefits
of Market
Segment
ation
Create stronger marketing messages
Identify the most effective marketing tactics
Design hyper-targeted ads
Attract (and convert) quality leads -When your
marketing messages are clear, direct, and targeted
they attract the right people.
Differentiate your brand from competitors
7. Benefits
of Market
Segment
ation
Build deeper customer affinity
Identify niche market opportunities
Stay focused
Better Matching Of Customer Needs
Identification Of Gaps In The Market
Increased ROI
Customer Retention
Increased Market Share
8. Within each of
these types of
market
segmentation,
multiple sub-
categories further
classify audiences
and customers.
9. Demogra
phic
Segment
ation
• Demographic segmentation is one of
the most popular and commonly used
types of market segmentation. It
refers to statistical data about a group
of people.
• Demographic Market Segmentation
includes -helpful for segmenting B2C
audiences
Age
Gender
Income
Location
Family Situation
Annual Income
Education
Ethnicity
• B2B audience: Company
size, Industry, Job function
10. Demographic
Segmentation-Example
B2C demographic segmentation could be a vehicle manufacturer that
sells a luxury car brand (ex. Maserati). This company would likely
target an audience that has a higher income.
In case of B2B, a brand that sells an enterprise marketing platform.
This brand would likely target marketing managers at larger
companies (ex. 500+ employees) who can make purchase decisions
for their teams.
11. Psychog
raphic
Segmen
tation
Psychographic
segmentation categorizes audiences
and customers by factors that relate to
their personalities and characteristics.
Psychographic Market
Segmentation Includes
Personality traits
Values
Attitudes
Interests
Lifestyles
Psychological influences
Subconscious and
conscious beliefs
Motivations
Priorities
12. Psychographic Segmentation-
EXAMPLE
• In case of B2C, The luxury car brand may choose to
focus on customers who value quality and status.
• While the B2B enterprise marketing platform may target
marketing managers who are motivated to increase
productivity and show value to their executive team.
13. Behavior
al
Segment
ation
While demographic and
psychographic segmentation focus
on who a customer is, behavioral
segmentation focuses on how the
customer acts.
Behavioral Market
Segmentation Includes
Purchasing
habits
Spending habits
User status
Brand
interactions
14. Behavioral Segmentation-
EXAMPLE
HERE B2C SEGMENT MAY BE THE LUXURY CAR BRAND
CHOOSING TO TARGET CUSTOMERS WHO HAVE
PURCHASED A HIGH-END VEHICLE IN THE PAST THREE
YEARS.
THE B2B MARKETING PLATFORM MAY FOCUS ON LEADS
WHO HAVE SIGNED UP FOR ONE OF THEIR FREE
WEBINARS.
15. Geograp
hic
segment
ation
For example, water might be scarce in some
regions which inflates the demand for bottled
water but, at the same time, it might be in
abundance in other regions where the demand
for the same is very less.
It divides the market on the basis of geography.
This type of market segmentation is important
for marketers as people belonging to different
regions may have different requirements. It
Includes Region, Size, Population Density, etc
16. Market Segmentation-In Nutshell
• It makes easier for companies to personalize their campaigns,
focus on what’s necessary, and group similar consumers to
target them in an effective manner.
• It is a convenient method marketers use to cut costs and boost
their conversions.
• It allows them to be specific in their planning and thus provide
better results.
• It ultimately helps them to target the niche user base by making
smaller segments.
17. Examples Of Market
Segmentation
• Beauty Products
While marketing beauty products, marketers often segment the
target market according to the age of the users, the skin type,
and also the occasion. A perfect example of this is Olay.
The company developed its ‘Age Defying’ product range to cater
to mature adults and ‘Clearly Clean’ range to cater to young
adults and teens.
18. Examples Of Market
Segmentation
• Fast Food
Fast food chains like McDonald’s often segment their target
audience into kids and working adults and develop different
marketing plans for both. Marketing efforts like distributing a toy
with every meal works well for kids and providing the food within
10 minutes, free WiFi, and unlimited refills work well for working
adults.
19. Examples Of Market
Segmentation
• Sports
Sports brands like Nike, Adidas, Reebok, etc. often segment the
market based on the sports they play which help them market the
sports-specific products to the right audience.