Market segmentation

• Market segmentation is the process of splitting a business’ target market into different groups.
• Businesses use these groups to make it easier for them to develop products aimed at certain people and to help them target their marketing.
• Small businesses generally split up their target market based on location, demographics, behaviour, lifestyle, income and age.
• Location Splitting up a market by location is also known as geographical segmentation.
• Demographic segmentation considers the characteristics of people, such as age, gender, race, religion, nationality, disability, ethnicity, sexual orientation and occupation.
• Behavioural segmentation considers how people behave in relation to purchases at different times of the year and in different situations.
• Lifestyle segmentation considers what sorts of lives the people in a business’ target market lead, taking into account hobbies, sporting interests and other things customers do in their spare time.
• Income segmentation considers how much people earn and how much disposable income they have.
• Market mapping is the process of using a graph to plot competitors and their products to understand competitor behavior and spot a gap in the market
• A gap in the market refers to a place in the market where there is demand for a product or service that is not currently being met
• A market map displayed as a graph makes it easy to see where gaps in a market exist, helping an entrepreneur launch a product or service more likely to succeed
• Two commonly measured elements on a market map are quality and price, but other examples include duration, taste, level of luxury, budget, age of the target market, and gender