Market segmentation is the process of grouping potential customers together by common characteristics such as gender, age or lifestyle.
Market segmentation is used to allow a business to more effectively tailor their products to a specific group of customers.
Markets can be segmented in a number of ways:
age– Different age groups will have different needs and wants. For example, a teenager will have a different fashion style than that of a pensioner. They may also have different tastes in restaurants or music.
gender– Males and females may have differing requirements from their products and services such as toiletries, grooming products and clothing.
location– Products and services can be tailored towards different geographical locations. This may be due to varying weather conditions.
occupation– Some products are tailored for customers with a specific occupation such as steel toe cap boots for mechanics or builders.
religion– Different religious groups may have specific needs and wants. An example of this could be Easter-themed products for Christians or halal food for Muslims.
lifestyle– A consumer’s lifestyle will have an influence on which products or services they purchase. A couple with no children will have different tastes and requirements from a couple with a young family.