• What is Market Segmentation? • What is the purpose of Market Segmentation? • What are the types of segmentation? Be able to know, define, and describe them. • Define social class. What is it divided based on? • What are target markets? Define them. • What is a niche market? • What industries overlap with sport fans? Why?

Market segmentation is the research that determines how your organization divides its customers or cohort into smaller groups based on characteristics such as, age, income, personality traits or behavior. These segments can later be used to optimize products and advertising to different customers.

Types of Market Segmentation

Geographic Segmentation

While typically a subset of demographics, geographic segmentation is typically the easiest. Geographic segmentation creates different target customer groups based on geographical boundaries. Because potential customers have needs, preferences, and interests that differ according to their geographies, understanding the climates and geographic regions of customer groups can help determine where to sell and advertise, as well as where to expand your business.

Demographic Segmentation

Demographic segmentation sorts a market by demographic elements such as age, education, income, family size, race, gender, occupation, nationality, and more. Demographic segmentation is one of the simplest and most commonly used forms of segmentation because the products and services we buy, how we use those products, and how much we are willing to spend on them is most often based on demographic factors.

Firmographic Segmentation

Firmographic segmentation is similar to demographic segmentation. The difference is that demographics look at individuals while firmographics look at organizations. Firmographic segmentation would take into consideration things like company size, number of employees and would illustrate how addressing a small business would differ from addressing an enterprise corporation.

Behavioral Segmentation

Behavioral segmentation divides markets by behaviors and decision-making patterns such as purchase, consumption, lifestyle, and usage. For instance, younger buyers may tend to purchase body wash, while older consumer groups may lean towards soap bars. Segmenting markets based off purchase behaviors enables marketers to develop a more targeted approach.

Psychographic Segmentation

Psychographic segmentation takes into account the psychological aspects of consumer behavior by dividing markets according to lifestyle, personality traits, values, opinions, and interests of consumers. Large markets like the fitness market use psychographic segmentation when they sort their customers into categories of people who care about healthy living and exercise.

Social class segmentation

Social class segmentation identifies individuals based on a combination of socioeconomic such as education, occupation, income, family background, and attitudes related to these factors. ... As a result, producers target versions of their products and their promotions to various lifestyle segments.

What Is a Target Market?

A target market refers to a group of potential customers to whom a company wants to sell its products and services. This group also includes specific customers to whom a company directs its marketing efforts. A target market is one part of the total market for a good or service.

Niche market

Niche marketing is a marketing tactic deployed to target a specific market segment which is unique. Niche market is often created by identifying what a customer wants and this can be done if the company knows what the customer needs and then tries to deliver a better solution to a problem which was not presented by other firms. A niche market does not mean a small market, but it involves specific target audience with a specialized offering. By doing so, the company becomes a market leader and it becomes possible for other firms to enter that particular segment. For example, there are various cinema halls across India, but there are few which have recliner seats to offer. Not everybody wants to watch a movie by paying 5x-6x times the cost of a normal ticket. Hence, the target audience is very different and the hall is also only open at places where the company feels that it would be able to tap into target audience especially in posh areas.

see explanation below.

Explanation:

Market segmentation is the process of dividing a large consumer base, that consists of existing and potential customers, into sub-groups of consumers based on the fact that they share some kind of characteristics. These characteristics include, age, income, personality traits or behavior. The segments can later be used to adopt an effective marketing mix that will ensure that customers will be influenced.

There are four types of Market Segmentation.

1. Geographic Segmentation:

Geographic segmentation targets different customer groups based on geographic borders. Some customers have needs that are particular to their environment and location. Understanding this will help to determined where to market your product and where to expand your business to.

2. Demographic Segmentation:

Demographic segmentation targets a market by demographic traits such as education level, race, income level, family size, nationality, gender, age, occupation, religion, etc.

3. Psychographic Segmentation:

Psychographic segmentation targets customers based on their intrinsic and personal traits, this differs from demographic segmentation because it focuses on traits like interests, attitudes, lifestyle, values, etc. Markets like the luxury car markets use psychographic segmentation to target people who think that owning luxury cars reflect their kind of lifestyle.

4. Behavioral Segmentation

Behavioral segmentation is somewhat similar to psychographic segmentation, but here, the focus is on the way customers go through their decision making and buying process. The way customers will react to your brand and how they use it is very useful in creating this segmentation.

Social class:

Social class is a concept in the field of social science, it is a model of social stratification that groups people into different hierarchical categories. The most common categories include, upper class, middle class, and lower class.

Social class is often divided based on wealth, influence, and status in society.

Target Market:

A target market refers to a particular group people, these people are potential customers who are likely to buy a company's products or services. They share common traits like demographics and geographic location. These groups also include specific customers to whom a company's marketing efforts are directed.

Niche market:

A niche market is a sub-segment of a larger market that is created based on its own unique needs, or preferences, that makes it different from the market at large. For instance, within the market for women's shoes are many different segments or niches. Niche markets are commonly created by recognizing what customers' wants are and then trying to meet these needs better than the competition.

The industries that overlap with sport fans include:

- sports tourism,

- sporting goods (manufacturing and retail),

- sports apparel,

- amateur participant sports,

- recreation,

- outdoor sports,

- sports businesses such as sport marketing firms, etc.

These industries overlap with sport fans because fans who are interested in various sports have diverse needs to fill, and these industries are there to help to fulfill these needs, while making profit.

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