Market segmentation: what is it, and what criteria does it take into account?

What is market segmentation and how is it used in marketing to reach the audience?

It is clear that the market encompasses consumers with very different characteristics, each with their own interests.

Therefore, it is essential to carry out a correct segmentation of the market if we want our product or service to be as successful as possible. Below we will find the keys to perform this task with the greatest precision.

What is market segmentation and what are its characteristics?

Market segmentation consists of dividing the market into smaller parts, thus delimiting the consumer segment we are interested in. This way, we can guide the distribution of our products or services to them in particular, increasing the chances of success. The key to this mechanism is that each group of consumers has a very marked idiosyncrasy, so the marketing techniques that work for some do not necessarily work for others.

In order to be able to talk about a correct market segmentation, it is necessary to fulfill a series of requirements in the process. The first of these would be the homogeneity of the segment on which we are going to focusIn other words, all the consumers in the segment must have the same characteristics (those that make them more likely to consume our product).

The second criterion would be the heterogeneity between the different segments.. The meaning of this question is that each segment must be different, since if the members of several segments have in common certain characteristics that interest us in our strategy, it will mean that we have not carried out an adequate segmentation for our needs.

Finally, there is the third criterion. This refers to the stability of the segments according to the division we have chosen. If the division is based on such changing factors that it allows consumers to move from one segment to another in a very short period of time, we will have serious problems in focusing our objectives on a given segment, since it will be too permeable and our marketing strategies will lose strength.

History of this marketing practice

Market segmentation techniques have been in use since the Bronze Age, so they are not new to the market.far from it. What is true is that they are becoming more and more technified and we have more and more knowledge to use them with the best criteria and thus be more successful in our strategies. In this sense, Richard S. Tedlow distinguishes four different stages throughout history.

1. Fragmentation

The first version of market segmentation that we can observe if we study history are those that were commonly used in commerce in ancient times, until almost the end of the 19th century. The way it worked was very simple, and consisted of The operation was very simple, and consisted of focusing on local consumers in a particular region.The operation was very simple, and consisted of focusing on local consumers in a particular region, directing all efforts to seduce these people and ignoring the rest, since they escaped its scope of distribution.

2. Unification

But from the 1880s until the 1920s, the phenomenon of mass marketing, also known as unification, took place. It is a time when transportation is improving substantially, largely thanks to rail lines being built all over the world, making it easier for goods to reach far-flung points in much less time.

The paradigm is therefore changing completely, and retailers, especially the big brands retailers, especially the big brands that are beginning to emerge, are focusing their efforts on reaching as many customers as possible.. The era of trade wars between companies begins, trying to get the largest market share before the competitor does.

3. Segmentation

Market segmentation as we know it today would emerge from the 1920s to the 1980s. This is the period in which brands began to get to know consumers better and know which ones tended to buy their products more easily, and which ones were more likely to buy them.They focus all strategies on enhancing this effect to improve results.

4. Hypersegmentation

From the 80's to the present day, this phenomenon is becoming more and more technological, reaching the era of big data, in which absolutely every characteristic of the consumer is controlled.The digital footprint that consumers leave in their wake and the valuable clues they leave behind about their consumption trends are being monitored in every aspect of the consumer's life. This is the birth of one-to-one marketing, in which virtually every individual is a market segment in itself.

Thanks to such a level of precision, a brand will know with almost mathematical certainty whether a person is likely to purchase its offerings, and will therefore place a very targeted advertisement for that person in the market segment. a very targeted advertisement for them in a specific digital medium, thus achieving the most personalized effect.thus achieving the most personalized and powerful effect.

Types of market segmentation

We already know in depth the characteristics of market segmentation. Now it is time to get to know a fundamental aspect of this technique: the different types that we can find, depending on the division criteria we choose. These are the best known.

1. Demographic

The first form of market segmentation is the most obvious. It is demographic, and It responds to criteria that have to do with characteristics of the population that can be quantified, such as gender, sex, age, age and gender identity.These include gender, age, income levels, type of employment or education, number of family members, marital status, socioeconomic status, race or religion.

Of course, the company will most likely take several of these criteria into account when establishing the ideal market segment for its brand. To do so, they use market research to provide them with a very valuable database on which to obtain results about the ideal demographic criteria to focus the marketing of their products and thus achieve more sales.

Geographic

The second most common division also happens to be the oldest. As we have already mentioned, in the early days of commerce, the basic criterion was to target the product to local consumers. This is still the case today, through the criterion of geographical division, because the characteristics of consumers in one place may be very different from those in another, even if there is no great distance between the two.even if there is not a great distance between them.

This does not mean that brands will only sell in a very localized area, but that they will probably follow different strategies depending on the territory where they are advertising their products. These differences may be subtle, if both groups share some characteristics, or very significant, if those differences are especially marked.

Some very successful advertising campaigns in one country may be disastrous or unimaginable at the moral or legal level in another place, if cultural, religious or general customs differ greatly from the first one.If the cultural or religious characteristics or customs in general are very different from the first one. That is why it is essential to study thoroughly the peculiarities of each geographical segment if we want to be successful and not get an unpleasant surprise.

3. Geocluster

Often it is not enough to take a single criterion for market segmentation, and we discover that the most sensible option is to use several of them. This is the case of geoclustering, or geodemographic segmentation, that plays with both demographic and geographic criteria to find the perfect population group on which to focus our brand's advertising..

4. Psychographic

Of course, psychological and personality characteristics are another major criterion on which market divisions can be established. Psychometrics gives valuable clues as to which aspects of an individual's lifestyle best match the product we are trying to sell, allowing us to focus on particular individuals.

According to the psychographic study, we may need to pay more attention to consumers with particular personality characteristics, as they are the most susceptible to the product we are trying to sell.These are the ones who are most likely to be persuaded by our advertising. Normally these studies are done specifically for the brand in question.

5. Behavioral

Another characteristic that has a lot to do with psychology in market segmentation is the psychology of consumer behavior.. Companies spend huge amounts of money simply observing their customers to find out when they buy, how often they buy, whether they are loyal to the brand, whether they were predisposed to buy or impulsive, their attitude towards the product, and many other issues.

This information is extremely valuable, as it allows corporations to know consumers almost better than they know themselves, and thus exploit the avenuesThis information is extremely valuable, as it allows corporations to know consumers almost better than they know themselves, and thus exploit the most likely avenues of access to tempt them to buy their product, the more times the better.

6. Situational

Context or situation is the last of the market segmentation criteria. Along the lines of the previous criterion, questions relating to the context in which the consumer has decided to make his purchase also offer companies data of immense value, since it also provides them with clues about the situations in which people are more vulnerable to advertising and therefore more likely to buy.

Bibliographical references:

• Ciribeli, J.P., Miquelito, S. (2015). Market segmentation by psychographic criteria a theoretical essay on the main psychographic approaches and their relationship with behavioral criteria. Vision for the future.
• Fernández-Huerga, E. (2010). The theory of labor market segmentation: approaches, current situation and future prospects. Economic research.
• López-Roldán, P. (1996). The construction of a typology of labor market segmentation. Papers: journal of sociology.