Market Segmentation
Usually it is not economical for a company to focus its marketing effort to the whole market. The reason behind is that some people might be interested in buying your product and some might not be, so you are wasting your time and effort on those people who don’t want to buy your products. For example, if I launch a Business Studies textbook for IGCSE students, will a NASA scientist be interested in my book.
NO!! So I will focus on the needs and wants of IGCSE students only because they will eventually buy my book. My pricing, my packaging, advertising everything will be focusing on IGCSE students because they are my target market or Market segment. This technique of dividing the market into segments and categorising the population on similar needs and wants is known as Market segmentation.
Bases of Segmentation
- Age: Products for kids, teens, old people.
- Income: different income levels of different people
- Lifestyle: types of activities people do to spend their time.
- Region: cold, hot, wet and dry places.
- Gender: male or female.
- Use of the product: Car may be used by an individual for private purpose or may be used by somebody else as a taxi.