Getting to know your consumers becomes much easier using various market segmentation types. In fact, it practically acts as a blueprint when coming up with effective marketing campaigns.

In this guide, we’ll be about discussing market segmentation types in detail along with a number of examples to help you gain a better understanding of the subject.

Let’s begin!

What is Market Segmentation?

As the name indicates, market segmentation is the process of classifying potential buyers into a number of segments or groups based on certain characteristics. Needless to say, each group comprises of members with similar characteristics.

Importance of Market Segmentation

Now you’re probably wondering why marketers should put in all this effort in the first place. Well, the fact is, classifying different groups’ makes it easier for marketing professionals to create personalized campaigns.

By breaking down the company’s target market into segmented groups, marketers don’t have to waste time in targeting each potential customer.

This allows marketers to be more efficient in terms of company resources, their time and of course, budget. Creating groups of similar customers allow marketing professionals to target potential consumers in the most cost-effective manner.

Market Segmentation Types

There are primarily 4 different market segmentation types. This includes:

1.     Geographic Segmentation

Does your brand have a widespread reach around the country or perhaps across the world? Well, then you’re probably familiar with geographic segmentation. As the name indicates, this type of market segmentation divides potential consumers on the basis of geography.

Example of Geographic Segmentation

For instance, did you know that Kit-Kat in Japan offers a plethora of wacky flavors (including wasabi and green tea flavor!) that aren’t available anywhere else in the world? Well, that’s primarily because people have a different taste palate all over the world.

Using a geographic segmentation allows companies to cater to people living in a specific location. This is incredibly important as customer needs are likely to vary depending on location, especially if you compare rural and urban areas.

2.     Demographics Segmentation

This is probably the most popular market segmentation out there. It involves splitting up your target consumers into variables such as:

  • Gender
  • Age
  • Income group
  • Family size
  • Occupation
  • Nationality

These variables make it easier for marketers to divide consumers into a number of groups. With the help of segmentation, companies are able to cater to needs and requirements of each group appropriately.

Example of Demographics Segmentation

Automobile companies can successfully use demographic segmentation. This is highly beneficial as the automobile market has a number of different price brackets. For instance, luxury car brands such as Rolls-Royce targets high-end buyers.

On the other hand, automobile companies such as Suzuki and Audi cater to buyers of various income groups, offering vehicles of different price-points.

3.     Behavioral Segmentation

In this marketing segmentation, marketing professionals segment customers based on their:

  • Purchasing pattern
  • Frequency of purchase
  • Loyalty status
  • Usage rate
  • Loyalty status
  • Attitude towards the product

Most marketing professionals are adamant that using behavioral segmentation is among the best ways to build market segments. Using behavioral segmentation allows marketers to come up with insanely effective (and personal) marketing campaigns – this becomes easier because they’re already aware of the purchasing habits of their consumers and know who to target.

Example of Behavioral Segmentation

In this case, promotional campaigns can be used to make rare buyers become frequent purchasers. Industries such as the smartphone market are likely to benefit the most out of this market segmentation.

For instance, you probably already know that Blackberry was designed to cater to business professionals. The company thus used a different marketing strategy that set it apart from other smartphone brands in the market.

4.     Psychographic Segmentation

As the name indicates, this kind of marketing segmentation is used to describe human characteristics of potential consumers. Psychographic segmentation plays an integral role in helping professionals come up with an effective marketing campaign.

Psychographic variables are popularly referred to as IAO variables which stands for interests, activities, and opinions. When using this type of market segmentation, professionals must primarily focus on trying to understand the customer on a psyche level. Only after this can he/she craft the perfect marketing strategy.

Some other popular variables include:

  • Lifestyle
  • Values
  • Personality
  • Perception
  • Attitudes
  • Self-image

Additionally, consumers may also be classified according to their personality traits. While this may seem similar to behavioral segmentation, it’s worth noting that psychographic segmentation only deals with the psychological aspects of consumers. This information can also be used to cultivate a brand personality that’s aligned with the company’s consumers.

Example of Psychographic Segmentation

For instance, Forever21 is a clothing brand that’s specifically catered towards women who want to look young and hip. This is quite unlike other clothing brands that cater to working women who are always on the go.

Market Segmentation Types: Conclusion

We hope this guide has answered your queries regarding market segmentation types. Have something that you’d like to ask? Hit us up in the comment section below!


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