Market Segmentation Strategies: Demographic, Geographic, Psychographic & Behavioral Analysis

Market

A group of potential customers who share common needs or wants and have the ability and willingness to purchase a product or service.

Mass marketing

A strategy that targets the entire market with one product and one marketing message, without considering differences among consumers.

Why the Use of Market Segments Is Increasing

Advances in technology and data analytics make it easier to identify and track customer differences.

Demographic Characteristics Analyzed by Marketers

Age

Advantages of Using Market Segments

Allows for tailored marketing that meets specific needs.

Behavioral segmentation

Dividing a market based on consumer behavior patterns such as purchasing habits, product usage, brand loyalty, or benefits sought.

Psychographic segmentation

Dividing a market based on lifestyle, values, interests, attitudes, and personality traits.

Geographic segmentation

Dividing the market based on location such as country, region, city, climate, or population density.

Demographic segmentation

Dividing the market based on measurable statistics like age, gender, income, education, occupation, or family size.

Value of Geographic Segmentation

Enables businesses to adapt products and promotions to regional needs.

Importance of Target Markets to Businesses

Helps businesses focus resources on customers most likely to buy.

Disadvantages of Using Market Segments

Higher marketing costs for research and separate campaigns.

Disadvantages of Mass Marketing

Low customer satisfaction due to lack of personalization.

Types of Behavioral Segmentation

Purchase behavior - How often customers buy or how loyal they are to a brand.

Advantages of Mass Marketing

Reaches a large audience quickly.

Value of Psychographic Segmentation

Reveals why consumers buy, not just who they are.

Marketing segments

The distinct groups of customers created through market segmentation.

Market segmentation

The process of dividing a broad market into smaller groups of consumers with similar characteristics or needs.

Target market

The specific group of consumers a business decides to focus its marketing efforts on.