Marketing : Market Segmentation

An organization cannot satisfy the needs and wants of all consumers. To do so may result in a massive drain in company resources. Segmentation is simply the process of dividing a particular market into sections, which display similar characteristics or behavior. There are a number of segmentation variables that allow an organization to divide their market into homogenous groups. These variables will be discussed briefly below

Demographic Segmentation

Demographics originate from the word ‘demography’ which means a ‘study of population’. The population can be divided into age, gender, income, and family lifecycle amongst other variables.

As people age their needs and wants change, some organizations develop specific products aimed at particular age groups for example nappies for babies, toys for children, clothes for teenagers and so on. Gender segmentation is commonly used within the cosmetics, clothing and magazine industry. All Bar One within the UK have developed their bars to attract the female audience, taking opportunity of the rise in the number of women who now enjoy ‘social drinking’. In the UK we have also seen the introduction of Maxim, (www.maxim-magazine.co.uk) a male lifestyle magazine covering male fashion, films, cars, sports and technology. We have also seen the introduction of unisex cosmetic products like CK1 which works on the similarities between the two genders.

Income segmentation is another strategy used by many organizations. Stores like Harrods, Harvey Nicholas are predominantly aimed at the affluent market. Daewoo aim their vehicles at price sensitive buyers who require a bundle of benefits for the price. In today's globally competitive environment brands are specifically developed and positioned within particular income segments in order to maximize turnover.

Products and services are also aimed at different lifecycle segments. Holidays are developed for families, the 18-30's singles, and for those in their 50's.

Geographic Segmentation

Geographical segmentation divides markets into different geographical areas. Marketers use geographic segmentation because consumers in different areas may display certain characteristics and behaviors in that particular region, for example, in London UK certain parts of the West End of London are more affluent then the East End and you will find particular products sold in these regions based on their affluence. An area can be divided by the town, the region or the country. If you are an organization working on a global scale you may divide by global regions such as Europe, North America, South America, Asia and Africa. McDonalds globally, sell burgers aimed at local markets, for example, burgers are made from lamb in India rather than beef because of religious issues. In Mexico more chili sauce is added and so on.