Market segmentation

The market segmentation is a marketing technique that consists of categorizing consumers into relatively homogeneous groups, called segments, based on their socioeconomic, psychological, geographical or behavioral characteristics that require differentiated strategies. Segmentation identifies similar groups of consumers according to their characteristics or variables that may influence their purchasing behavior. One of its characteristics is that the segments are homogeneous groups since they have similar attitudes, which is why it is likely that they will respond in a similar way to certain marketing strategies.

Types of segmentation

Different types of segmentation or classification of potential customers have been proposed based on different types of variables. A common segmentation is to use the following types of variables.

1. Geographical variables: Region of the world or country, country size, climate, city, region, country.
2. Population variables: Age, gender, sexual orientation, family size, family life cycle, family income, profession, educational level, socio-economic status, religion, nationality, cultures, race, generation.
3. Psychographic variables: personality, values, attitudes, interests.
4. Socioeconomic variables: income level, lifestyle, etc.
5. Behavioral variables: Benefit search, product utilization rate, brand loyalty, end product use, "list-to-consumer" level, decision-making unit.

When many variables combine to provide deep insight into the segment, it is known as deep segmentation. When enough information is given to create a clear picture of the typical member of the segment, it is called a buyer profile. A commonly used statistical technique in determining a profile is group analysis (cluster analysis).

Depending on who produces and who buys the results, market segmentation can be divided into the following three types:

1. Segmentation ad-hoc: when an independent company performs segments specifically designed in its own products and treats the results as commercial intelligence
2. Syndicated segmentation: when an independent agency performs segments to market with multiple clients. Segments represent industries or geographic environments that multiple companies can use.
3. Feral segmentation: when segments emerge in the market and in popular culture spontaneously. Opinion leaders generate segments that some marketing agencies use organically.

Benefits of Marketing Segmentation

• Identify the most specific needs for submarkets or consumers.
• Improve marketing strategy
• Optimize the use of business resources
  • Marketing
  • Production
  • Logistics
  • Advertising
• Identify your own niche where you have no direct competition.
• Increase the chances of rapidly growing in market segments without competitors with their products

Requirements for good segmentation

The requirements for good segmentation are:

• Homogeneity in the segment
• Heterogeneity between segments
• Stability of segments.

If these conditions are met, it can be guaranteed that customers within each segment will exhibit similar behaviors (intra-segmental homogeneity), that the behavior of different segments will be different (intersegmental heterogeneity), and that the variation is largely explained by the variables that define the segment. Finally, stability implies that the segmentation based on studies at a given moment remains more or less unchanged over time and only minor changes would be necessary.