Market Segmentation

Market segmentation is one of the steps that goes into defining and targeting specific markets. It is the process of dividing a market into a distinct group of buyers that require different products or marketing mixes.

A key factor to success in today's market place is finding subtle differences to give a business the marketing edge. Businesses that target specialty markets will promote its products and services more effectively than a business aiming at the "average" customer.

Opportunities in marketing increase when segmented groups of clients and customers with varying needs and wants are recognized. Markets can be segmented or targeted using a variety of factor. The bases for segmenting consumer markets include:

Demographical bases (age, family size, life cycle, occupation)

Geographical bases (states, regions, countries)

Behavior bases (product knowledge, usage, attitudes, responses)

Psychographic bases (lifestyle, values, personality)

A business must analyze the needs and wants of different market segments before determining their own niche. To be effective in market segmentation keep the following things in mind:

Segments or target markets should be accessible to the business

Each segmented group must be large enough to provide a solid customer base.

Each segmented group requires a separate marketing plan.

Large companies segment their markets by conducting extensive market research projects.This research is often too expensive for small businesses to invest in, but there are alternative ways for to a small business to segment their markets.

A small business can do the following to