Market segmentation is one of the oldest marketing tricks used by businesses, which has become more critical with the growth of online digital marketing nowadays.
Now, there are four most commonly used types of segmentation, with respect to the customer population and their preferences.
In fact, businesses launch products and services keeping the market segmentation in mind.
Now in order to understand market segmentation, there are three unique ways to classify what your customers want in the marketplace.
It is known as needs, wants, and demands.
Therefore the first step in segmentation is to determine which type of customer will prefer your products and services, which will govern the nature of your targeted segment of customers that you are seeking to find using campaigns in the marketplace.
In this sense market segmentation is a strategy that illustrates the rule of “divide and conquer”, or rather to say divide the market in order to conquer them all.
Hence while using market segmentation in an easy to use CRM tool, it provides the marketers to find better attention to the selection of customers in its database and offers an appropriate marketing mix for each chosen group or segment of prospective buyers that are having homogeneous demands.
Therefore now that we know that market segmentation is a strategy that involves dividing a broader target market into several subsets of consumers those that have common needs, let us find out the types of marketing segmentation that can help marketers to reach these consumers using media channels and several other touchpoints that best allows to reach them by implementing marketing campaigns using a business CRM tool.
As we said even before, there are basically four different types of market segmentation and all of them vary in their implementation in the real world.
Hence let us discuss each of them now in detail.
1. Demographic Segmentation
This is one of the most widely used and simplest of all the types of market segmentation that is used by businesses.
This segmentation divides the population, based on variables such as gender, age, level of education, family size, occupation, income, race, religion, and nationality.
For example, demographic segmentation can target potential prospective customers solely based on what they earn, so that your marketing budget is not wasted sending messages at people who likely cannot afford your offerings.
2. Behavioral Segmentation
This type of market segmentation when done using a business growth technology and tools divides the population on the basis of their usage, behavior, and decision-making patterns.
For example, this type of market segmentation is especially a boom in the smartphone market, whereby the iPhone was launched for premium customers who want to be a part of a unique and popular niche, but Android phones like Samsung was launched for consumers who like various applications for free and Blackberry phones were launched exclusively for the business people.
3. Psychographic Segmentation
This segmentation differentiates the customers and prospects by using the lifestyle of people, their interest, activities as well as their opinions to define the market.
Now psychological segmentation is much similar to behavioral segmentation, however psychological segmentation also takes the buying behaviors of the consumers into account like their lifestyle, social standing, and others.
For example, while brands like Zara markets themselves on the basis of lifestyle, where consumers that want the latest and differential clothing can visit their stores, on the other hand, Arrow markets itself as a premium office lifestyle where possibly your boss shops for sharp clothing.
4. Geographic Segmentation
Finally, this last type of segmentation divides the consumers on the basis of where they reside, since potential buyers have different needs based on their geographical locations.
For example, people who live in non-municipal areas might need RO water filters whereas those that live in cities might require UV based water purifiers, which illustrates that need can really vary on the basis of geography, or where they live in.
Similarly, while companies like Whirlpool might market heaters in cold regions, the same company might be targeting for air conditioners for consumers living in warm places across the globe.
Hence, to sum up, we can easily say that market segmentation is important to businesses since it allows brands to adapt their communication style to suit the needs of the audience, and thereby allows marketers to build marketing campaigns using an easy to use CRM, with appropriate offers and content, which can more effectively reach the consumers and promote their product and services for business growth.