Different customers express a variety of needs, wants, resources, or generally speaking buying attitudes. Therefore, each market provides an opportunity for the manufacturers to form separate segments. This idea implies dividing the entire market into smaller units, which establishes a better possibility of more efficient product or service distribution because such units meet the unique needs of customers. There are different methods of segmenting a consumer market; thus, the marketer may implement some variables alone or incorporate them to improve the market structure.
The primary variable applied to the segmentation is geographical, which is used for splitting the market according to the geographic units: nation, states, regions, cities, countries, or neighborhoods. The manufacturer may distribute its products within one chosen area or operate its service within some of them but concentrate on the needs of each region. The majority of companies tend to localize the production, promotion, and advertising of their services and items to meet the individual needs of a city, region, country, etc. For instance, the McDonald’s fast-food restaurant chain may introduce specialty burgers with local flavors. The marketers also pay attention to the density of the area to forecast sales.
The most popular type of segmentation is called demographic that divides the consumer market according to age, gender, occupation, income, religion, life-cycle, education, and ethnicity. Typically, the needs and wants of a person differ from the demographic variables. Moreover, they are easy to measure in contract with other variables. This type of segmentation is principal as it assesses the size of the market more efficiently. It is clear that when people get older, their tastes change, so companies try to adjust their services and products to a specific age group. The age is supposed to be the main buying power predictor in a row with gender. For instance, gender has been widely applied in the sphere of cosmetics. Thus, Sephora has been introducing a lot of makeup products for women but recently started to launch men’s lines. Income is also a factor to consider as it is crucial to produce the goods for all the layers of society.
Psychographic segmentation uses the technique of segmenting customers following their lifestyle, personal characteristics, and social class. Customers of the same demographic group may have different behavioral tendencies. For example, the “French flea market” produces items for those who lead a Bohemian lifestyle. The personality streaks often reflect the target audience too, so Nike is for active and adventurous, and BOSCH presents reliability. The psychographic variables are usually complicated to determine. The marketers try to conduct a survey that can be time-consuming, expensive, or expertise demanding.
The fourth type of market segmentation is behavioral as it presupposes consumer’s beliefs, knowledge, and attitude towards the product. Typically, the buyer purchases the product relying on their loyalty to a brand, use pattern, additional benefits, or usage status. Brand loyalty shows that the customer will not switch to another manufacturer. However, clients are prone to changing brands due to the prices. Benefits show the features preferred by certain groups; use patterns differentiate customers according to the frequency of use. All these factors are quite complicated to define as they demand a specific survey.
To sum everything up, it is necessary to state that variables are essential in segmenting the market as they may determine the efficiency of the product distribution. Researching and analyzing the markets need to be conducted regularly to correspond with the current status of consumers.