Market Segment

What Is a Market Segment?

The term market segment alludes to individuals who are grouped together for the end goal of marketing. Market segments are part of a bigger market, frequently lumping people together in light of at least one comparative qualities. Corporations and their marketing groups utilize different criteria to foster a target market for their products and services. Marketing experts approach each segment in an unexpected way, yet solely after they completely grasp the requirements, lifestyles, demographics, and personality of the target consumer.

How Market Segments Work

A market segment is a category of customers who have comparable preferences in a generally homogeneous market. These customers can be people, families, businesses, organizations, or a blend of numerous types.

Market segments are known to answer to some degree typically to a marketing strategy, plan, or promotion. To this end marketers use segmentation while settling on a target market. As its name recommends, market segmentation is the method involved with isolating a market into sub-groups, in which its individuals share common qualities.

To meet the most essential criteria of a market segment, three qualities must be available:

• there must be homogeneity among the common requirements of the segment
• there should be a distinction that makes the segment unique from different groups
• the presence of a common reaction or a comparable and to some degree unsurprising response to marketing is required

Common qualities of a market segment incorporate interests, lifestyle, age, orientation, and so forth. Common instances of market segmentation incorporate geographic, demographic, psychographic, and behavioral.

Companies that comprehend market segments can impress be effective marketers while earning a greater return on their investments.

Instances of Market Segments and Market Segmentation

The banking industry gives a generally excellent illustration of how a company markets to specific market segments. All commercial banks service a large number of individuals, a considerable lot of whom have interesting life circumstances and monetary objectives. If a bank has any desire to market to baby boomers, it conducts research and may find that retirement planning is the main part of their financial necessities. The bank can then market tax-deferred accounts to this consumer segment.

To effectively market products and services to millennials, Roth IRAs and 401(k)s may not be the best option. All things being equal, the bank might conduct inside and out market research and discover most millennials are planning to have a family. The bank utilizes that data to market college-accommodating savings and investment accounts to this consumer segment.

Some of the time a company as of now has a product yet may not yet have its target consumer segment. In this scenario, it depends on the business to characterize its market and provide food its offering to its target group. Restaurants are a genuine model. In the event that a restaurant is close to a college, it can market its food so as to captivate college understudies to appreciate party time as opposed to attempting to draw in high-value business customers.

Features

• The criteria for a market segment incorporate homogeneity among the segment's principal needs, uniqueness, and a common reaction to marketing strategies.
• A market segment is a group of individuals who share at least one comparable qualities.
• Corporations and marketing groups utilize different criteria to foster target markets for their products and services.
• The reaction from market segments to marketing plans or strategies is commonly entirely unsurprising.
• Common market segment traits incorporate interests, lifestyle, age, and orientation.

FAQ

How Do You Identify Market Segments?

Overall, a market segment requires the accompanying three criteria. To begin, the principal needs of a sub-group must be homogenous. Second, the segment must share distinct qualities. At last, the segment delivers a comparative response to marketing methods. Prospective purchasers are grouped into different segments, frequently founded on how much value they place on a product or service.

How Are Market Segments Used?

Commonly utilized in marketing strategies, market segments assist companies with upgrading their products and services to suit the requirements of a given segment. Market segments are frequently used to recognize a target market.

What Is an Example of a Market Segment?

Think about a company that markets wellbeing and magnificence products to all kinds of people. These products, for example, razors or skin care, are normally more costly for ladies than they are for men. The product bundling additionally contrasts — products targeted to ladies having pinks and botanical accents that line up with orientation stereotypes. Then again, the company's male-targeted products are portrayed by additional tough blacks and grays.