Market segmentation involves dividing a market into groups of consumers who are similar in specific characteristics and will respond similarly to marketing strategies. There are four main types of market segmentation: demographic segmentation which divides by variables like age, income, gender; behavioral segmentation which divides by behaviors like usage rate or benefits sought; psychographic segmentation which divides by personality traits, values, attitudes; and geographic segmentation which divides by location. Effective segmentation allows customized marketing messages to meet the specific needs of different consumer groups.

1. Marketing
Segmentation

2. Target
Customer
Segment
Market segmentation is the process of
dividing a market of potential customers
into groups, or segments, based on
different characteristics. The segments
created are composed of consumers who
will respond similarly to marketing
strategies and who share traits such as
similar interests, needs, or locations.
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3. 4 Types of
Marketing
Segmentation
Demographic Segmentation
Behavioral Segmentation
Psychographic Segmentation
Geographic Segmentation

4. Demographic Segment:
Demographic comes from the word
demography which means “study of
population”
 Demographics are commonly utilized to segment markets because
demographic information is publicly available in databases around the world.
You can obtain a great deal of demographic information on the U.S. Census
Bureau’s Web site (http://www.census.gov). Other government Web sites you
can tap include FedStats (http://www.fedstats.gov) and The World Factbook
(http://www.cia.gov/cia/publications/factbook), which contains statistics
about countries around the world. In addition to current statistics, the sites
contain forecasts of demographic trends, such as whether some segments of
the population are expected to grow or decline.

5. Demographic Segmentation
Advantages
• Demographic variables are typically easier
to collect and measure versus those of
other segmentation techniques.
• Targeting is typically more straightforward
when using demographics as a metric--
e.g., you can target a consumer group
such as college-educated millennials, or
men between the ages of 35 and 45.
• Consumer profiles are easy to understand
across the board, which lends itself to an
easier strategy development process in
terms of internal collaboration between
departments (e.g., sales, customer
service, management, etc.).
Disadvantages
• Similar demographics do not always imply
similar needs, values or motivations
within a particular demographic group.
• The effectiveness of your marketing
message may be hampered by a "one-size-
fits-all" approach to the consumers within
a given demographic segment.
• Skewed or problematic demographic data
within a given region can produce
unreliable assumptions, potentially
reducing the accuracy of your marketing
message and methods.

6. Behavioral Segmentation:
Form of market
segmentation that groups
consumers based on
specific behavioral
patterns they display when
making purchase decisions.

7. Behavioral Segmentation
Advantages
•The opportunity exists for brands to
build targeted consumer segments
based on their responsiveness to
certain product categories, promotion
types or path-to-purchase preferences.
•Monitoring and understanding the
behavior of consumers online has
become much more precise and
granular due to advances in data
collection and tracking technologies
(e.g., cookies, beacons, pixels, etc.).
•Brands can now craft their marketing
messages based on consumer habits
and practices that have already been
proven
Disadvantages
• While consumer behavior can be
tracked, it is not always easy to
pinpoint the motivations behind
those behaviors, as they can vary
greatly from person to person.
• Behavioral segmentation is often
based on complex data constructs
that are not always easy to
understand.
.

8. Psychographic Segmentation:
is dividing your market based upon
consumer personality traits, values,
attitudes, interests, and lifestyles.
Segmentation will allow you to
better develop and market your
products because there will be a
more precise match between the
product and each segment's needs
and wants.

9. Psychographic Segmentation
Advantages
• This form of segmentation provides insight
into the motivations behind consumer
behavior, providing marketers with a more
accurate picture of what makes their
potential customer "tick."
• Brands can more easily identify the
underlying motives and needs of their
target audience, enabling them to
customize more compelling marketing
messages.
• Psychographic segmentation provides a
better overall understanding of the
consumer, better overall understanding of
the cons enabling brands to execute
effective emotive marketing to highly
responsive segments.
Disadvantages
• Psychographic data have traditionally
been more difficult to obtain than other
"a priori" data collection methods (e.g.,
demographics, consumer behavior, etc.).
• It can be difficult to obtain data for
consumers in a given population, as
participation in a psychographic survey is
usually necessary. However, psychographic
segments can be statistically projected
across a population with predictive
modeling, though the accuracy of segment
assignment will be significantly less than
with a prospective survey.
• Clear rules regarding the interpretation of
data must be put in place to ensure
consistency of approach among the
individuals/departments that engage in
customer segmentation analysis.

10. Geographic Segmentation:
Is when a business divides its
market on the basis of
geography. You can
geographically segment a
market by area, such as cities,
counties, regions, countries,
and international regions. You
can also break a market down
into rural, suburban and urban
areas.

11. Geographic Segmentation
Advantages
• Geographic segmentation allows large
companies to target the varying wants and
needs of customers in different regions.
• Geographic segmentation is an effective
methodology used by organizations with
large national or international markets to
better understand the location-based
attributes that comprise a specific target
market.
• Consumers that live in different
geographic regions typically display
varying needs, wants, and cultural
characteristics that can be specifically
targeted for more efficient and better
marketing.
Disadvantages
• Assumes that consumers in a geographic
area are similar, which is generally
unlikely across a broad area
• Usually needs to be used in conjunction
with another segmentation base

12. Steps in the
Market
Segmentation