Market segmentation is the approach of grouping similar consumers or clients together in a market segment, the location where the consumers or clients have identical demands and purchasing behavior.
Market segmentation is the approach of grouping similar consumers or clients together in a market segment, the location where the consumers or clients have identical demands and purchasing behavior.
A marketplace can be segmented according to various sorts of aspects, and industrial markets are segmented rather differently from consumer market segments, as explained directly below.
Consumer Market Segmentation
A foundation for segmentation is considered to be an element that differs among different categories of people within a market; however which in turn happens to be consistent within groups. Consumer marketplaces can be segmented using the following customer attributes:
- Geographic segmentation– is primarily based on geographical parameters which include location (continent, country or region), environment, Population density (urban, suburban, or rural), and also population size as well as growth rate.
- Demographic segmentation– is based primarily on factors including age group, gender, ethnicity, education level, profession, social class, family lifecycle and income.
- Psychographic segmentation– is based on specifics including values and ethics, interests and perceptions, and also life-style.
- Behavioural segmentation- is based mostly on factors which include consumption rate and behaviours, price consciousness, brand trustworthiness, consumer attitudes, consumer status (potential, first-time user or regular) and also positive factors.
business or Industrial Market Segmentation
In comParison to consumers, industrial or business customers in many cases are significantly less in quantity and in addition buy greater quantities. They assess choices in much more depth, and in addition the decision-making process in most cases involves multiple people.
The majority of the consumer market segmentation parameters can potentially be applied to business or industrial markets. These markets can be segmented on qualities including; Georgraphical location, company or customer type and behavioral characteristics.
When it comes to commercial markets, client or customer geographic location can potentially be crucial in a number of instances. Shipping and delivery costs are sometimes a decision making factor pertaining to vendor selection for products having to deal with a massive volume to value ratio, and as a result distance from the vendor can potentially be significant.
Business customers or clients are in many cases categorized based on selection as listed below:
- Size of the organization or business
- Size of the industry
- Decision making unit
- Position in the value chain
- Purchase Criteria
- Behavioral Characteristics
In business oriented market segments, purchasing behavioural actions can be described as basic foundation pertaining to segmentation. These kinds of behavioral traits consist of:
- Consumption rate
- Order quantity
- Buying condition (potential, first-time or frequent)
- Purchase decision process (negotiations on terms or sealed bids)
- Loyalty
Definition, Concept & Justification of marketing ?
Marketing Plan: Key Elements & Action Plan
Marketing Plan: A Clear Structure/ Criteria/ Outline
Marketing Mix: Background, Definition & Objectives of 4 P’s
The Marketing Mix: 4 P’s Policy
The Life Stages Of A Product: Concept, Features, Phases & Choices
Product Life Cycle Extension Strategies
Product Diffusion Curve: Concept, Model & Determined Factors
The Diffusion of Innovation: Product Adoption Decision-Making Process & Influencing Factors
Market Segmentation: Overview & Key Elements
