Market segments

Just as you can divide an orange up into segments you can divide the population as a whole into different groups of people or segments [Segments: Groups with the same or similar needs and wants often divided by age, gender, income, lifestyle, and culture. ] that have something in common. Segmenting the market makes it easier to identify groups of people with the same consumer needs and wants. Marketers therefore look for categories they can use to divide up the population.

There are five commonly used categories:

• Age
• Gender
• Culture
• Income
• Lifestyle

Age

Different products are targeted at children and the over 60s

The population can be divided by age in years (eg 0-16, 17-25) or by the stage of life reached (eg schoolchild, teenager). For example, a pensioner will have similar needs to those of other pensioners but different needs from those of a teenager.

Gender

Products can be targeted at men or women

Products may be targeted at a specific gender group. For instance, cosmetics have been traditionally targeted at women while DIY has been targeted at men.

Culture

Products can be targeted at different cultural groups

People's needs and wants as consumers will vary according to their religion, language, social customs, dietary habits and ethnic background. In the UK businesses provide for a wide range of different cultures. For example, there are magazines and newspapers in many different languages and Halal butchers in areas with large Muslim populations.

Income

The market can be divided into socio-economic groups

The population can be segmented according to annual salary (eg £15,000, £30,000 etc.), or type of job and social class. Establishing a group's disposable income [Disposable income: Money left after essentials are paid for. ] is important so that products can be targeted to the relevant income group. This is called a socio-economic segment [Socio-economic segment: Generalised group by job, class and income. ]. The socio-economic groups A, B, C1, C2, D and E describe how much the head of the household earns.

Lifestyle

Products can be aimed at a lifestyle group

People are grouped according to the way they lead their lives and the attitudes they share. For example, young professionals may drive a sports car because of the image they want to project. Married parents might want the same things, but have to provide for their children, which is a large extra cost. They will need a family car to suit their lifestyle.