Market Segmentation is the sprightliness of segregating a target market into smaller, more defined sections. It divides customers and audiences into factions that share identical attributes such as demographic, psychographic, behavioural and geographic.
The market segment that must be selected is the one in which the business investment will burst forth successfully. The germaneness of segmentation will aid the business to impel competitive knowledge which will have a robust positive repercussion on the freshly developed competitive edge.
There are several approaches to segment the target market.
Demographic – segmenting the consumers by personal attributes such as age, sex, education, occupation, marital status, ethnicity and amongst others
Psychographic – values, attitudes, interests, ambitions, opinions, lifestyle, personality traits
Behavioural – usage of the products or services, loyalty to specific products or services, the benefits they are looking for
Geographic – country, city, village, region and amongst others.
For example, a business that sells motorbikes; we can categorise its customers into more segments, we can alter the classes of bikes that it can sell to various customers. One portion can be working-class consumers looking for motorbikes to use daily to go to work. Another segment can be young men who want sports motorbikes. Moreover, we can find business people with larger pockets who wish to buy a fully-equipped luxury motorbike. The identified segments, although comparable in range, differ in their valuable components and have a different level of attractiveness for a specific target.
Once these segments are rationally categorised per target customers, the business will find more and better sales growth.