Market segmentation: what it is, and criteria it takes into account

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

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

• Related article: "7 keys of Psychology applied to Marketing and Advertising"

What is market segmentation and what are its characteristics

Market segmentation consists of dividing the market into smaller parts, thus limiting the consumer segment that interests us. in order to guide the distribution of our products or services towards them specifically, 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 have to work for others.

In order to speak of a correct market segmentation, it is necessary to meet a series of requirements in the process. The first of them would be

the homogeneity of the segment in which we are going to focus, that is, that all the consumers that make it up meet 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 to our needs.

Finally we find the third criterion. This refers to the stability of the segments according to the division we have chosen. And it is that, if the division is made according to factors so changing that it allows consumers to move between one segment and another in a very short interval of time, we will have serious problems to focus our objectives on a certain segment, as it will be too permeable and our marketing strategies will lose force.

History of this marketing practice

Market segmentation techniques They have been in place since the Bronze Age, so they are not something new, far from it. What is certain is that they are increasingly more technical and have more knowledge to be able 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 used habitually in the commerce of the antiquity, until almost the end of the century XIX. The operation was very simple, and consisted of focus on local consumers in a specific 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 to the 20s of the twentieth century, the phenomenon of mass marketing, also called unification, occurs. It is a time when transportation improves substantially, largely thanks to the rail lines that are built all over the world, thus making it easier for goods to reach very far points in a long time less.

Therefore, the paradigm changes completely, and retailers, especially emerging big brands, focus their efforts on reaching as many customers as possible. The time of commercial 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 20s to the 80s of the last century. It is the time when brands are beginning to get to know consumers better and better and know which are those who tend to acquire their products more easily, so they focus all strategies on enhancing this effect to improve results.

4. Hypersegmentation

From the 80's to today This phenomenon is becoming more and more technical, reaching the era of big data, in which every characteristic of the consumer is absolutely controlled, taking advantage especially of the fingerprint that they leave behind and the valuable clues they deposit there about their trends in consumption. It is the birth of one-to-one marketing, in which practically each individual is a market segment unto himself.

Thanks to such a level of precision, a brand will know almost with mathematical certainty if a person is likely to acquire his offers, and therefore will place a very specific advertisement for her in a certain digital medium, thus achieving the most personalized and powerful effect.

• You may be interested in: "The 7 elements of an advertisement"

Types of market segmentation

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

1. Demographic

The first form of market segmentation is the most obvious. It's about demographics, and responds to criteria that have to do with characteristics of the population that can be quantifiedsuch as gender, age, income levels, type of employment or education, number of family members, marital status, socioeconomic status, race or religion.

Of course, the company most likely takes several of these criteria into account when establishing the ideal market segment for its brand. For this they are helped by market research that provides them with a very valuable database on which to obtain the results about the ideal demographic criteria to focus the marketing of your products and thus achieve more sales.

2. Geographic

The second most frequent division also happens to be the oldest. As we have already mentioned, in the origins of commerce, the basic criterion was to orient the product to local consumers. Today it is still done, through the criterion of geographical division, since the characteristics of consumers in one place may be very different from those in another, even if there is not a great distance between them.

This does not mean that brands only sell in a very localized area, but 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 these differences are especially marked.

Some very successful advertising campaigns in one country can be disastrous or morally or legally unimaginable elsewhere., if the cultural, religious characteristics or the customs in general differ a lot from the first one. That is why it is essential to thoroughly study the peculiarities of each geographic segment if we want to be successful and not get an unpleasant surprise.

3. Geocluster

Many times it is not enough to take a single criterion to perform market segmentation, and we found that the most sensible option is to use several of them. This is the case of geoclusters, or geodemographic segmentation, which play with demographic and geographic criteria at the same time to find the perfect population group on which to focus the advertising of our brand.

4. Psychographic

Of course, psychological and personality characteristics are another of the great criteria on which market divisions can be established. Psychometry gives valuable clues about the lifestyle aspects of individuals that fit the best with the product we are trying to sell, allowing us to focus on a few people in particular.

According to the psychographic study, we may need to cater more to consumers with specific personality characteristics, since they are the most likely to be persuaded by our advertising. Normally these studies are done specifically for the brand in question.

5. Behavioral

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

This information is extremely valuable, as enables corporations to know consumers almost better than themselves, and thus exploit the most likely access routes to make them fall into the temptation of purchasing your product, the more times the better.

6. Situational

Context or situation is the last of the market segmentation criteria. In line with the previous criterion, questions related to the context in which the consumer has decided to make their purchase also offers companies some data on immense value, since it also provides them with clues about the situations in which people are most vulnerable to advertising and therefore more prone to to buy.

Bibliographic 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. Future vision.
• 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 job market segmentation. Papers: magazine of sociology.