Ã¢ÂÂ¢Segmentation criteria for 2 products bottled water and breakfast cereal.
Marketers segment markets because it helps them to match their products better to their customers, as every customer is different (age, sex, etc.) and has differing needs and wants dividing the market into segments helps the marketer focus on these subgroups leading to a 'target market'.
This target market can then be selected and a marketing mix can be made especially for them. This can save a business time and money as it can be planned well as it is aimed straight at potential customers. Also a greater understanding of who these customers are and what their needs are can enable the business to gain a competitive advantage.
This is different from undifferentiated marketing where one marketing mix is made for the whole market (mass marketing). (Brassington & Pettitt, 2006).
Consumer markets can be segmented in a few ways to group together customers with similar characteristics and needs.
More than one segmentation variable can be used (multivariable segmentation.).
Ã¢ÂÂ¢Geographic location - This is based on that certain characteristics of people are assumed to be similar within certain countries and regions i.e. religion / culture. They will be affected by the same climate, may have similar income and influenced by the natural geography of the area and country.
Ã¢ÂÂ¢Demographically - This is based on the different characteristics found within the population. Age (e.g. clothing) and gender (e.g. beauty products). Family size (e.g. size of products) and Ethnic background (e.g. food). Life cycle stage (e.g. types of holidays, Saga /Club18-30).
Ã¢ÂÂ¢Psychographic and Behavioural - This is based on what people think and how this affects how they want to live their lives.
Social class, this can be divided by social stratification showing differences in purchasing power and patterns of behaviour.