Market Segmentation: What It Is, And Criteria It Takes Into Account
It is evident that the market includes consumers with very different characteristics, each with their own interests.
Therefore, it seems essential to carry out correct market segmentation if we want to make our product or service as successful as possible. Below we will find the keys to be able to carry out this task with the greatest precision.
What is market segmentation and what are its characteristics?
Market segmentation consists of dividing the market into smaller parts, thus limiting the segment of consumers that interests us in order to guide the distribution of our products or services towards them specifically, increasing the chances of success. The key to this mechanism is that each group of consumers has a very marked idiosyncrasy, so the marketing techniques that work for some do not necessarily work for others.
In order to talk about correct market segmentation, it is necessary to meet a series of requirements in the process. The first of them would be the homogeneity of the segment on which we are going to focus that is, that all the consumers that comprise it meet the same characteristics (those that make them more likely to consume our product).
The second criterion would be the heterogeneity between the different segments The meaning of this question is that each segment must be different, since if the members of several segments have certain characteristics in common that interest us in our strategy, it will mean that we have not carried out a segmentation appropriate to our needs.
Finally we find the third criterion. This refers to the stability of the segments according to the division we have chosen. And the fact is that, if the division is made based on such changing factors that allow consumers to move between one segment and another in a very short interval of time, we will have serious problems focusing our objectives on a certain segment, since it will be too permeable and our marketing strategies will lose strength.
Market segmentation techniques They have been applied since the Bronze Age, so they are not something new , far from it. What is certain is that they are increasingly more technical and we have more knowledge to be able to use them with the best criteria and thus be more successful in our strategies. In this sense, Richard S. Tedlow distinguishes four different stages throughout history.
1. Fragmentation
The first version of market segmentation that we can observe if we study history are those that were commonly used in commerce in ancient times, until almost the end of the 19th century. The operation was very simple, and consisted of focus on local consumers in a specific region directing all efforts to seduce these people and ignoring the rest, since they escaped its scope of distribution.
2. Unification
But from the 1880s until the 20s of the 20th century, the phenomenon of mass marketing, also called unification, occurred. It is a time in which transportation improves substantially, largely thanks to the railway lines that are built around the world, thus making it easier for goods to reach very distant points in a much shorter time.
Therefore, the paradigm changes completely, and Merchants, especially the big brands that are beginning to emerge, focus their efforts on reaching the largest number of customers possible The era of trade wars between companies begins, trying to get the largest market share before the competitor does.
3. Segmentation
Market segmentation as we know it today would emerge from the 1920s to the 1980s. It is the time when Brands are beginning to know consumers better and know which ones tend to purchase their products more easily so they focus all strategies on enhancing this effect to improve results.
4. Hypersegmentation
From the 80s to today, This phenomenon is becoming more and more technical, reaching the era of big data , in which every characteristic of the consumer is controlled, especially taking advantage of the digital footprint they leave in their wake and the valuable clues they deposit there about their consumer trends. It is the birth of one-to-one marketing, in which virtually every individual is a market segment unto themselves.
Thanks to such a level of precision, a brand will know with almost mathematical certainty whether a person is likely to purchase its offers, and therefore will place a very specific advertisement for her in a certain digital medium thus achieving the most personalized and powerful effect.
Types of market segmentation
We already know in depth the characteristics of market segmentation. Now it’s time to know a fundamental aspect of this technique: the different types that we can find, depending on the division criteria we choose. These are the best known.
1. Demographic
The first form of market segmentation is the most obvious. It’s about demographics, and responds to criteria that have to do with characteristics of the population that can be quantified such as sex, age, income levels, type of employment or education, number of family members, marital status, socioeconomic level, race or religion.
Of course, the company will most likely take several of these criteria into account when establishing the ideal market segment for its brand. To do this, they use market research that provides them with a very valuable database from which to obtain results regarding the ideal demographic criteria to focus the marketing of their products and thus achieve more sales.
2. Geographic
The second most common division also happens to be the oldest. As we had already mentioned, in the origins of the trade, the basic criterion was to direct the product to local consumers. Today it continues to be done, through the criterion of geographical division, since the characteristics of consumers in one place may be very different from those in another although there is not a great distance between them.
This does not mean that brands only sell in a very localized area, but rather that they will probably follow different strategies depending on the territory where they are advertising their products. These differences may be subtle, if both groups share some characteristics, or very significant, if these differences are especially marked.
Some advertising campaigns that are very successful in one country can be disastrous or unimaginable on a moral or legal level in another place , if the cultural, religious characteristics or customs in general differ greatly from the first. That is why it is essential to thoroughly study the peculiarities of each geographic segment if we want to be successful and not get an unpleasant surprise.
Many times it is not enough to take a single criterion to carry out market segmentation, and we discovered that the most sensible option is to use several of them. This is the case of geoclusters, or geodemographic segmentation, which plays at the same time with demographic and geographical criteria to find the perfect population group on which to focus our brand’s advertising
4. Psychographic
Of course, psychological and personality characteristics are another of the great criteria on which market divisions can be established. Psychometrics give valuable clues about the aspects of individuals’ lifestyles that best fit the product we are trying to sell, allowing us to focus on particular people.
According to the psychographic study, we may need to cater more to consumers with specific personality characteristics , since they are the most likely to be persuaded by our advertising. Normally these studies are done specifically for the brand in question.
5. Behavioral
Another feature that has a lot to do with Psychology in market segmentation is related to consumer behaviors Companies spend huge amounts of money simply observing their customers to find out when they buy, how often they buy, if they are loyal to the brand, if they were predisposed to buy or it is impulsive, their attitude towards the product, and many other questions. .
This information is extremely valuable, since allows corporations to know consumers almost better than themselves and thus exploit the most likely access routes to make them fall into the temptation of purchasing your product, the more times the better.
6. Situational
The context or situation is the last of the market segmentation criteria. In line with the previous criterion, questions related to the context in which the consumer has decided to make their purchase also offers companies data of immense value, since it also provides them with clues about the situations in which people are most vulnerable. to advertising and therefore more inclined to buy.
