Segmenting the Market

1. Demographics

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:

• College students with a part-time job
• Women of ages 40–50 with full-time employment with a yearly income of at least £40,000
• Retired people with no responsibility for children and a yearly income of at least £30,000

The main categories for demographic segmentation are:

• Age – e.g. children, young adults, the elderly.
• Gender – ​e.g. male, female, non-binary.
• Marital Status​ – e.g. single, married, divorced, in a civil partnership
• Race & Ethnicity​ – e.g. Asian, Asian British, Black, Black British, Caribbean, African, White, Mixed.
• Religion​ – e.g. Christianity, Islam, Hinduism, Buddhism, Sikhism, Judaism.
• Family size – ​e.g. no children, small family, large family.
• Income – e.g. low income, lower-middle income, upper-middle income, high income.
• Occupation – ​e.g. manager, professional, skilled labour, administrative, retail.
• Education level – e.g. ​secondary, bachelor’s degree, master’s degree & above.
• Socio-economic group – e.g. Higher & intermediate managerial, junior managerial, skilled manual occupation, unskilled manual.

2. Geographic

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:

• The time zone and area of the country the target market/customers live in
• Is it a rural, suburban or urban environment
• The local language spoken in the geographical area.

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.

3. Psychographic

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:

• Social class​ – e.g. working class, middle class, upper class
• Attitudes​ – e.g. liberal, conservative, old-fashioned.
• Lifestyle – e.g. fitness fanatics, student, business professional, party-goers.
• Personality​ – e.g. introverted, extroverted, friendly, opinionated.

4. Behavioural

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:

• Spending & Consumption – e.g. weekly, monthly, one-off.
• Rate of Usage – e.g. daily, weekly, monthly.
• Loyalty Status – e.g. high, medium, low.
• Desired Benefits – e.g. convenience, price, uniqueness.