There are different ways that we can segment the market. It could be based on the audience’s demographics, geographic location, psychographics or behavioural factors.
In this lesson, we’ll learn about:
Market segmentation based on demographics means dividing customers into categories like their age, gender, employment status, life stage, family structure, religion and income.
Here are a few examples of demographic descriptions:
The main categories for demographic segmentation are:
Can you think of any products that target people based on their religion? What about their occupation? Try and identify examples for 5 of the different demographic categories listed above.
Geographic segmentation describes the physical location of a company’s target customers. When an enterprise thinks about geographic segmentation, they might focus on factors such as:
This can help to provide better support for customers by understanding their needs. For example, there is no point in having a customer support line running during UK working hours when your target audience are all based in Australia.
It also allows you to understand specific factors based on the audience locations, such as how people in hot countries may have more interest in an ice-cream product than people who live in very cold countries. There are also other cultural factors based on location, like how red is viewed as lucky in China but is considered a sign of danger in the UK.
What products do you think might be targeted at a specific location in the UK? Think about locally sourced produce.
Psychographics describes the basic, inherent, fundamental, intrinsic personal qualities of customers in your target market. This includes things like their hobbies and leisure activities, entertainment interests and preferred sources of information.
For example, people who play a certain sport (football) as a hobby, people who watch a certain sport (football) as a leisure activity, viewers who prefer to watch romantic movies as opposed to horror movies, etc.
The main categories for psychographic segmentation are:
It’s not just selling goods and services that market segmentation is used. How might a political party use psychographics to target voters?
Behavioural patterns are those habits that describe/state your customers’ purchasing habits, the reason why they want to purchase it, when and how frequently they buy and use your product or service and also the qualities they are looking for in the product or service.
It includes segmenting the customers based on their attitude toward your brand or products, their purchasing tendencies, such as buying on special occasions like birthdays or holidays only, etc.
The main categories for behavioural segmentation are:
How would you classify yourself in terms of the above behavioural categories? Could this be used to target you with products? How?
So to summarise what we’ve learnt in this lesson: