Marketing Segmentation
Successful market segmentation depends on four basic criteria: 1) a market segment must be substantial and have enough potential customers to be viable, 2) a market segment must be identifiable and measurable, 3) members of a market segment must be accessible to marketing efforts, and 4) a market segment must respond to particular marketing efforts in a way that distinguishes it from other segments. Make sure your segmentation meets all of the above.
Five bases are commonly used for segmenting consumer markets. Geographic segmentation is based on region, size, density, and climate characteristics. Demographic segmentation is based on age, gender, income level, ethnicity, and family life cycle characteristics. Psychographic segmentation includes personality, motives, and lifestyle characteristics. Benefits sought is a type of segmentation that identifies customers according to the benefits they seek in a product. Finally, usage segmentation divides a market by the amount of product purchased or consumed.
Segmenting Consumer Markets
Sample Segmentations Sections:
Athletic Boots
We have selected a subgroup (market segment) of people from the total population (market); who share one or more characteristics that will cause them to buy the Athletic Boots through the process of market segmentation.
Our target segment meets the four basic criteria which include:
Substantiality- It is large enough to have its special marketing mix because we’re targeting people living in big cities; San Francisco, Los Angeles and New York.
Identifiability-The subgroup chosen is identifiable because we have clearly identified it using demographics, geographic, psychographic, benefit sought and usage rate, and its size is measurable.
Accessibility- The subgroup is reachable using a number of IMC tools e.g. TV, Radio, Magazines and Internet.
Responsiveness-The market selected will be able to respond positively to the messages sent because it is a great product and the market wants it.
Target Market Description
Our ideal customers are women, from the ages of 18 to 45. They are in the middle to upper social class. They are single young graduates and professional career women with families. They value the way they look and take responsible measures to preserve their lives. They live in big cities like San Francisco, Los Angeles and New York. They enjoy a healthy lifestyle coupled with maximum physical exercise through sport and going to the gym. They value their families and their friends. They want products that will make their lives easier through convenience because they are very busy.
Bases for Segmentation
Geographic Segmentation: We are specifically targeting people who live in the urban, metropolitan cities (San Francisco, Los Angeles, New York); San Francisco is our primary geographical focus because of its cold weather.
Demographic Segmentation: Age-We’re targeting people between the ages of 18-50 (Gen Yer’s and Gen Xer’s).Gender-The Athletic Boots are created and designed for women. They are independent of ethnicity and religion basically depends on the individually values and lifestyle. Family Life Cycle-We target single with no children; as well as married women with families because we have a wide age group. Occupation and Income-These women range from young graduates with a low, start-up income to professional career women with a high income. This segment also includes College or University students and homemakers (stay at home mothers).
Psychographic Segmentation: Personality - We’re targeting women with bubbly personalities, women who are bold and trend setters. Social Class-They fall under the middle to upper social class. Lifestyle-These women take care of themselves by working out and they have an overall active and healthy lifestyle. They are motivated by looking and feeling great inside and out. Geodemographics-We find these women in big metropolitan, urban cities like San Francisco.
Benefit Segmentation: Our target market seeks the benefit of ease and convenience; warmth that comes with the Athletic Boots without putting anything else on, and also the relief from cold and stress of thinking how it is affecting their health and subsequently their performance.
Usage-Rate Segmentation: Athletics Boots are a relatively new product; which makes it harder to segment based on past experiences with the product or usage patterns. So we look at the usage rate of competing brands; how the market used their products and the problems faced when using that product.
We target people with healthy lifestyles, these people work out or do some sort of sport. The probably engage in these activities at least once a day; meaning they’ll wear the Athletic Boots at least once, everyday.
Their readiness stage is unaware because this is a new product, hence there is no brand loyalty shown at the moment. Their attitude towards product will be enthusiastic because Athletic Boots are a new innovation they’ve never seen before.
Ofeeld Photography has two types of ideal customers:
Pet Photography Customers: The ideal customer for Ofeeld Photography - Pet Photography is 30-60 years old and owns a pet. More specifically, who owns a pet and treats them like family. The pet is an extension to their family and one that they adore. These people want professional photographs of their pets. However, studio portraits for their pets do not allow for a picture that really captures the expressions of their dog, cat, horse or other animal. These people need a local professional photography that can go to a location of their choice and photograph their pet in the setting that best gives the pictures the expressions of the animal.
Demographics: Age: 30-60+, Income: $50,000+/year, Occupation: Professional
Psychographics: Our ideal customersis a professional who owns a pet. More specifically, one who owns a pet and treats them like family. These people view their pets as an extension of their family and want to capture their personality in pictures which are not done in a studio.
Behaviors: They are active in their family and personal life, especially outdoors.
Geographics: The ideal client lives in the Ohmtown area. Ofeeld Photography customers could also come from outlying areas and other smaller towns within a 20-30 mile radius.
Neon Memories Diner – 50’s Style
When they are in Whoville visiting their son and his family (wife, eight-year-old daughter, five-year-old son, and 3-year-old son), the Smiths want to treat entire family to dinner at a special restaurant. The Smiths, Betty and John, are a lawyer and a doctor, respectively, and can afford most options, although they don't have a desire to spend a great deal of money just for the sake of spending it. They need an restaurant with a relaxed environment, where their grandchildren will not be a disturbance and, ideally, they'd like entertainment for the children. They seek what they think of as "comfort food" -- traditional American fare like hamburgers, milkshakes, fries, etc. But they don't want a fast food experience, like at McDonald's or Burger King. The Smiths want to know that there will be a great deal of options for all of the family members, in order to serve their grandson's current pickiness about food, their daughter-in-law's health kick, and their son's allergies. Therefore, they need a restaurant with an extensive menu.
Most importantly, they want the entire experience to be fun and colorful; so that their grandchildren will remember that going out to dinner with their grandparents is a fun time and something to look forward to.
Neon Memories Diner seeks to serve customers fitting the following characteristics:
The ideal customer for Goodman Insurance is just about to move to San Francisco. It is a young couple expecting a new child. They have left a rental apartment in another town and need more space for their family as well as the security which home ownership provides. They may have had insurance in the past, but have not spent much time researching it, instead opting to use a large national provider, perhaps even ordering it over the phone for their renter's insurance needs.
Suddenly, they have multiple needs for insurance in a new city - life insurance, homeowner's insurance, and other property insurance. They are aware of their basic insurance needs, although they do not know all of the ins and outs of insurance types and options available. As they would like to settle into the town and make it their home, they want to feel more of a personal connection with their insurance agent and put a face to this service. However, they are a bit afraid of making a bad choice, being that they don't know the town and perhaps have no contacts in the town. They want the assurance of someone with a track record of client satisfaction and transparency about how he is compensated so that they can rule out any biases or conflicts of interest.
Five bases are commonly used for segmenting consumer markets. Geographic segmentation is based on region, size, density, and climate characteristics. Demographic segmentation is based on age, gender, income level, ethnicity, and family life cycle characteristics. Psychographic segmentation includes personality, motives, and lifestyle characteristics. Benefits sought is a type of segmentation that identifies customers according to the benefits they seek in a product. Finally, usage segmentation divides a market by the amount of product purchased or consumed.
Segmenting Consumer Markets
Sample Segmentations Sections:
Athletic Boots
We have selected a subgroup (market segment) of people from the total population (market); who share one or more characteristics that will cause them to buy the Athletic Boots through the process of market segmentation.
Our target segment meets the four basic criteria which include:
Substantiality- It is large enough to have its special marketing mix because we’re targeting people living in big cities; San Francisco, Los Angeles and New York.
Identifiability-The subgroup chosen is identifiable because we have clearly identified it using demographics, geographic, psychographic, benefit sought and usage rate, and its size is measurable.
Accessibility- The subgroup is reachable using a number of IMC tools e.g. TV, Radio, Magazines and Internet.
Responsiveness-The market selected will be able to respond positively to the messages sent because it is a great product and the market wants it.
Target Market Description
Our ideal customers are women, from the ages of 18 to 45. They are in the middle to upper social class. They are single young graduates and professional career women with families. They value the way they look and take responsible measures to preserve their lives. They live in big cities like San Francisco, Los Angeles and New York. They enjoy a healthy lifestyle coupled with maximum physical exercise through sport and going to the gym. They value their families and their friends. They want products that will make their lives easier through convenience because they are very busy.
Bases for Segmentation
Geographic Segmentation: We are specifically targeting people who live in the urban, metropolitan cities (San Francisco, Los Angeles, New York); San Francisco is our primary geographical focus because of its cold weather.
Demographic Segmentation: Age-We’re targeting people between the ages of 18-50 (Gen Yer’s and Gen Xer’s).Gender-The Athletic Boots are created and designed for women. They are independent of ethnicity and religion basically depends on the individually values and lifestyle. Family Life Cycle-We target single with no children; as well as married women with families because we have a wide age group. Occupation and Income-These women range from young graduates with a low, start-up income to professional career women with a high income. This segment also includes College or University students and homemakers (stay at home mothers).
Psychographic Segmentation: Personality - We’re targeting women with bubbly personalities, women who are bold and trend setters. Social Class-They fall under the middle to upper social class. Lifestyle-These women take care of themselves by working out and they have an overall active and healthy lifestyle. They are motivated by looking and feeling great inside and out. Geodemographics-We find these women in big metropolitan, urban cities like San Francisco.
Benefit Segmentation: Our target market seeks the benefit of ease and convenience; warmth that comes with the Athletic Boots without putting anything else on, and also the relief from cold and stress of thinking how it is affecting their health and subsequently their performance.
Usage-Rate Segmentation: Athletics Boots are a relatively new product; which makes it harder to segment based on past experiences with the product or usage patterns. So we look at the usage rate of competing brands; how the market used their products and the problems faced when using that product.
We target people with healthy lifestyles, these people work out or do some sort of sport. The probably engage in these activities at least once a day; meaning they’ll wear the Athletic Boots at least once, everyday.
Their readiness stage is unaware because this is a new product, hence there is no brand loyalty shown at the moment. Their attitude towards product will be enthusiastic because Athletic Boots are a new innovation they’ve never seen before.
Ofeeld Photography has two types of ideal customers:
Pet Photography Customers: The ideal customer for Ofeeld Photography - Pet Photography is 30-60 years old and owns a pet. More specifically, who owns a pet and treats them like family. The pet is an extension to their family and one that they adore. These people want professional photographs of their pets. However, studio portraits for their pets do not allow for a picture that really captures the expressions of their dog, cat, horse or other animal. These people need a local professional photography that can go to a location of their choice and photograph their pet in the setting that best gives the pictures the expressions of the animal.
Demographics: Age: 30-60+, Income: $50,000+/year, Occupation: Professional
Psychographics: Our ideal customersis a professional who owns a pet. More specifically, one who owns a pet and treats them like family. These people view their pets as an extension of their family and want to capture their personality in pictures which are not done in a studio.
Behaviors: They are active in their family and personal life, especially outdoors.
Geographics: The ideal client lives in the Ohmtown area. Ofeeld Photography customers could also come from outlying areas and other smaller towns within a 20-30 mile radius.
Neon Memories Diner – 50’s Style
When they are in Whoville visiting their son and his family (wife, eight-year-old daughter, five-year-old son, and 3-year-old son), the Smiths want to treat entire family to dinner at a special restaurant. The Smiths, Betty and John, are a lawyer and a doctor, respectively, and can afford most options, although they don't have a desire to spend a great deal of money just for the sake of spending it. They need an restaurant with a relaxed environment, where their grandchildren will not be a disturbance and, ideally, they'd like entertainment for the children. They seek what they think of as "comfort food" -- traditional American fare like hamburgers, milkshakes, fries, etc. But they don't want a fast food experience, like at McDonald's or Burger King. The Smiths want to know that there will be a great deal of options for all of the family members, in order to serve their grandson's current pickiness about food, their daughter-in-law's health kick, and their son's allergies. Therefore, they need a restaurant with an extensive menu.
Most importantly, they want the entire experience to be fun and colorful; so that their grandchildren will remember that going out to dinner with their grandparents is a fun time and something to look forward to.
Neon Memories Diner seeks to serve customers fitting the following characteristics:
- 45-70 years old
- $80,000+ household income
- Have grown children and, often, grandchildren as well
- Professional (white collar) occupations
- Located in and around Whoville
- Believe that the '50s and '60s represented a simpler, more comfortable time
- Believe in the importance of the nuclear family and the value of family outings/entertainment
- Seek traditional American cuisine
- Are not highly concerned with health or calories at EVERY meal (although may be concerned overall)
- Hold positions of respect in their communities
The ideal customer for Goodman Insurance is just about to move to San Francisco. It is a young couple expecting a new child. They have left a rental apartment in another town and need more space for their family as well as the security which home ownership provides. They may have had insurance in the past, but have not spent much time researching it, instead opting to use a large national provider, perhaps even ordering it over the phone for their renter's insurance needs.
Suddenly, they have multiple needs for insurance in a new city - life insurance, homeowner's insurance, and other property insurance. They are aware of their basic insurance needs, although they do not know all of the ins and outs of insurance types and options available. As they would like to settle into the town and make it their home, they want to feel more of a personal connection with their insurance agent and put a face to this service. However, they are a bit afraid of making a bad choice, being that they don't know the town and perhaps have no contacts in the town. They want the assurance of someone with a track record of client satisfaction and transparency about how he is compensated so that they can rule out any biases or conflicts of interest.
Photo used under Creative Commons from hardwarehank
