Customer Segmentation: 4 Ways to Segment Consumer Markets

Customer segmentation also consumer segmentation or client segmentation is unavoidable when companies want to reach the target markets. Customer Segmentation strategy enables marketing managers to stretch budgets and achieve the desired goals by reaching the most relevant groups to becomes leads. Niche marketing enables marketers to craft and deliver messages specifically for the target audience. This process will connect markers to the target customers, influence and develop relationship and the message will resonate the customers.

There are different ways to segment a market which enables marketers to reach the target consumers for their products and services. In business-to-consumer marketing, there are different marketing segmentation variables.

  1. Age
  2. Gender
  3. Education
  4. Social Class
  5. Life Style
  6. Marital status

On the other hand, business-to-business marketing, there are different ways to segment customers that is

  • Industry
  • Company size
  • Technology
  • Loyalty
  • Nature of existing relationship

Market Segmentation allows marketers to reach their target audience by 4 ways to segment customer base into demographic, geographic, psychographic and behavioral segmentation.

Demographic Segmentation

Demographic segmentation is a marketing strategy that segment the market based on Age, Gender, Family Life Cycle, income, Occupation and Education. Demographic segmentation is easy to implement and very useful. Victoria's Secret lingeries company will focus on females i.e. gender-based demographics or Luxury car manufactures will choose household income level more than $150,000. A bookseller may shape a message that resonates to students.

Demographic segmentation is fair enough when marketers approaching multiple segments at a time. For example, a Fashion Magazine target Asian (Geographic) females (Demographic) who are working (Psychographic) because they consider the women a sales lead.

Focusing different customer segmentation at a time empower marketers to reach the targeted market where the conversion rate is very high. It will certainly increase marketing efforts put and money spent.

Geographic Segmentation

Geographic segmentation is a strategy where companies target audience based on country (United States or China) region (West South Central) metro-size (over or under 60,000) and climate (northern, southern). This segmentation may broader enough and narrow as well from a country to a street.

Geographic segmentation is equally important for both large and small businesses. Small business owners can take advantages of by pointing targeted audience. They will need a small advertising budget to reach the target customers. For example, a small fast food “Chicken N Fire” may use flyers, banners within the location. Another example is Pizza GOGO locale in South East England and has 100 branches, looking to cover all the UK in future. But currently, GOGO will spend its advertising budget to target audience in the current region South East.

Consider Large business, for instance, BALSAM HILL is an artificial Christmas trees provider may target United States, United Kingdom and where people celebrate Christmas. Let say advertising this Ad in Asian market may not able BALSAM HILL to generate leads.

Psychographic Segmentation

Psychographic segmentation divides customer base into less tangible segment groups such as personality, lifestyle, interest, social class and values. Every customer has unique psychographic characteristics. This segmentation is difficult to implement as compared to both demographic and geographic segmentation.

Marketers need a comprehensive research to segment the market based on psychographics. They may interview customers to find their likes and dislikes.  Don’t need to shy, ask the questions to know insight who really are your buyers. Dealing mass population, survey might be a good way to gather data in order to implement psychographic segmentation successfully.

A good example of psychographic segmentation is targeting price-conscious consumers.  B&M Stores in United Kingdom is a good example of discount stores. They attract potential customers with messages like “Clearance Sale, Now in Stores” or “Don’t Miss Out, Limited Time Offer”. These marketing messages really pay off. There are many other discount stores like Light in the Box, these stores message always attract budget-conscious target audience like “Daily Deals 70% OFF.

Behavioral Segmentation

Behavioral segmentation divides consumers on the basis of their behavior, attitude towards product and service, loyalty, occasion, usage rate, readiness and liking. In marketing, management markers tend to in-depth study the consumer behavior. Before taking a purchase-decision there are several factors affect the consumer behavior. The consumer decision is based on his behavior and marketers target exact behavioral segmentation.

There are different ways to use behavioral segmentation. For example, take hotel industry may focus target customer on new year as it is a moment of outdoor celebration. On the other hand, Eid and Christmas is considered a family celebration. Mostly on such occasion customer do shopping and purchase gifts. Gift-oriented business will have spent more on advertising to attract such consumers.

Hospitality segment is another example of behavioral segmentation. There are four segments of the hospitality industry, food and beverages, travel and tourism, recitation. Hospitality industry always thrives to provide excellent services which will help to retain the customer.

Each segment owns unique characteristics. We discussed four types of customer segmentation. Marketers try to use multiple segmentation bases to reach target niche markets. Segmentation is applicable all over the world that benefits marketers regardless of size and industry.