Market segment - what is it? Segments of the financial market. Selection of target market segments

The concept of market segmentation

Selection of target market segments

Product positioning.

Market niche.

1. The concept of market segmentation

In modern conditions of market development, it is almost impossible to satisfy all consumers with the help of one product or service. Everyone has their own desires, interests, expectations from the product. Therefore, companies need to take into account the differences in the requirements and expectations of consumers when developing a marketing strategy and marketing mix. This can be done by dividing the market into specific groups, each of which includes consumers with common characteristics and similar needs for certain goods and services. The identification of these groups is called market segmentation.

An enterprise in its activities can focus on the entire market or on individual market segments. The task of marketing is to help the company find its place in the market.

Under segmentation understand the division of the market into separate segments, differing either in their parameters and or in their reaction to certain types of activities, or in some other way.

Market segment- this is a specially allocated part of the market, a group of consumers, goods or enterprises that have some common features.

Market segmentation is one of the functions in the system of marketing activities and is associated with the implementation of work on the classification of buyers or consumers of goods that are on the market or brought to it. The main goal of segmentation- "revive" by focusing on the consumer designed, manufactured and sold the flow of goods (services) in a specific market segment.

The splitting of the underlying market is done in two steps, which correspond to two levels of market splitting.

At the first stage, which is called macro-segmentation, the “product market” is identified.

In the second step, called micro-segmentation, within each previously identified market, customer segments are identified (i.e., the selection of small areas of the underlying market to apply the company's marketing efforts to).

The segmentation process consists of the following steps:

Analysis of the market and marketing opportunities of the company

Study of segmentation criteria

Market segmentation

Market environment analysis and target market selection

Choosing and planning a strategy for the company's behavior in the market

Assessment of attractiveness and selection of target market segments

Positioning of goods on the market

Marketing mix planning

Marketing mix development

Organization of the company's activities in a new market segment

Segmentation goals:

The best satisfaction of the needs and requirements of people, fitting the goods at the request of the buyer

Strengthening competitive advantages

Ensuring the rationalization of costs for the production and sale of products

Orientation of all marketing work to a specific consumer

Linking the science and technology firm to customer needs

Avoiding competition by moving into an undeveloped segment.

Pre-segmentation- the initial stage of marketing research, focusing on the study of the maximum possible number of market segments.

Final segmentation- the final stage of market analysis, the conduct of which is regulated by the capabilities of the company itself and the conditions of the market environment. It is associated with the search for optimal market segments in order to position products on them that meet consumer demand and the capabilities of the company.

Depending on the type of consumer of goods or services, segmentation of consumers of consumer goods and consumers of goods for industrial purposes is distinguished.

Thus, the consumer segment in the market of the firm's products consists of consumers with similar needs and behavioral or motivational characteristics, which creates favorable marketing opportunities for the firm.

The main purpose of segmentation is to ensure targeting of the product being developed, produced and sold. By means of it, the main principle of marketing is carried out - consumer orientation.

Segmentation - This is the process of dividing buyers into separate groups according to certain characteristics, due to which they react in a similar way to a certain positioning strategy. The characteristics include: volume, frequency of purchases, commitment to a particular brand, the way the product is used. Segmentation is the process of identifying subgroups of buyers in the total mass of market consumers, the possibility of segmentation appears when the total market demand, thereby representing the possibility of dividing it into separate segments, according to one or another dominant feature.

The basis for segmenting consumer markets is the characteristics of buyers and their reaction to the products offered. The main variables for segmenting consumer markets include: geographical, demographic, psychographic, behavioral. Variables can be used individually or in combination with each other. Market segments must be measurable, accessible, have the appropriate size, distinctive features, and activity.

Market segment - a group of buyers with similar needs

segmentation levels. The variety of media - advertising media and distribution channels makes it difficult to use unified marketing. Some analysts argue that mass marketing is dying. More and more companies are moving away from it and are turning to micro marketing at one of four levels - segment level, niche level, region level, and individual level.

1) Marketing in the market segment. The task of the company is to identify segments and decide which ones to serve. A company can create a product or service that, according to its functional and price characteristics, meets the needs of the consumers that make up the segment. The choice of optimal distribution and communication channels has been simplified, the circle of competitors is more clearly visible - these are companies serving the same market segment. Possibility of using a flexible market offer - a common solution (elements of products and services that have value for all members of the segment) and additional options (value for some entities)

2) Marketing in a market niche. A market niche is a narrower group that needs a distinctive set of benefits, a niche is usually identified by dividing a segment into sub-segments or by identifying a group of consumers who seek a certain set of benefits. The attractiveness of market niches is determined by the following characteristics: niche buyers have a certain set of needs; they are willing to pay a high price to the company that is best able to meet their needs; the probability that a competitor company will pay attention to this particular niche is small; the firm receives certain cost savings due to narrow specialization; a niche has a certain volume, profit level and growth prospects.

3) Local marketing. It is based on special marketing programs aimed at meeting the needs of local groups of buyers: Shopping zones, stores for residents of remote areas, stores for specific customers. Proponents of this level consider nationwide advertising campaigns to be made sense because they do not take into account regional characteristics and needs. Possible disadvantages: reduced economies of scale, increased production marketing costs, diluted brand image.

4) Individual marketing. At the last level of segmentation, there is a place to be "segment-individual", "personal marketing", "adaptive marketing". This approach is not applicable everywhere, but with its help, the company can quickly secure a competitive advantage.

Stimulation of trade, repeat purchases through the satisfaction of individual preferences of buyers and demonstrations of additional features.

Real-time market research, study of customer preferences.

Reducing the costs of manufacturers and suppliers: goods that are not needed are not produced, and therefore there is no forced sale at discounts and disposal.

Stages of the segmentation process

1. Segmentation by needs. Consumers are grouped into segments based on the similarity of needs and desired benefits in solving a specific consumer problem.

2. Identification of segments. For each segment of needs, distinctive (functional) demographic characteristics, lifestyles and consumer behavior are determined.

3. Assessment of attractiveness of segments. Using pre-defined criteria (such as market potential, intensity of competition, market access), the overall attractiveness of each segment is determined

4. Assessment of profitability of segments. The profitability of each segment is determined.

5. Positioning in segments. For each segment, based on its unique needs and characteristics, a “value proposition” and a product positioning strategy (including an approximate price level) are developed.

6. "Litmus paper" of one's own abilities. To assess the attractiveness of positioning strategies for each segment, their own “plots” are developed.

7. Drawing up a marketing mix. Expansion of the positioning strategy, including all other elements of the marketing mix: product, price, promotion, distribution

Segmentation strategies:

1) Concentration of efforts on a single segment. Carrying out concentrated marketing allows the company to more clearly assess the needs of customers and secure a strong market position. Through specialization, the firm achieves cost savings, which encourages expansion of production and increases spending on advertising and promotional activities. In addition, by taking a leading position in the selected segment, the company reduces the payback period of investments. Concentrated marketing involves an increased level of risk. Many firms prefer the tactic of simultaneously entering several market segments.

2) Selective specialization. A selectively specializing company selects several market segments that are attractive in terms of goals and available resources. Target segments can be both similar and completely different, but each of them promises the company high income. A multi-segment strategy gives the firm the ability to spread risk across multiple areas.

3) Product specialization. Some companies concentrate their efforts on the release of one product, but offered to several market segments. However, with this approach, there is a risk that its products will be forced out of the market by a new, more advanced product produced by a competitor using advanced technologies.

4) Market specialization. With market specialization, companies focus on meeting the various needs of a selected group of consumers. However, with this approach, there is a risk that in the event of budget cuts for consumers in this group, they will refuse the services and goods of the supplier.

5) Full market coverage. With full market coverage, the company strives to provide all consumer groups with all the goods they need.

Only large companies are capable of implementing a full market coverage strategy. The company seeks to capture the market through undifferentiated or differentiated marketing.

A company with an undifferentiated marketing strategy ignores segment differences and enters the entire market with a single offer. When developing goods and marketing programs aimed at reaching as many consumers as possible, the emphasis is on mass sales and mass advertising. The purpose of the supplier is to form a positive image of the product in the minds of consumers. Undifferentiated marketing is "brother of standardization and mass production". The development of a narrow assortment group of goods allows you to reduce production costs, reduce the cost of storage and transportation, as well as the cost of marketing research and advertising.

The strategy of differentiated marketing provides for the development of several market segments by the company, for each of which a separate program is being developed. Differentiated marketing allows you to achieve large (in comparison with undifferentiated) sales volumes, but the costs of doing business also increase. Costs that may increase when using differentiated marketing:

The cost of modifying goods. The development of a modified product in order to more accurately meet the needs of various market segments entails additional costs for research and development, design development and / or the purchase of special equipment,

Production costs. The production of ten units of ten different types of products is much more expensive than the production of one hundred units of one product. The longer the process of organizing new production, the smaller the “circulation” of each type of manufactured product, the more expensive the product itself becomes. However, if the volume of sales of all types of goods produced by the firm is large enough, the high costs associated with the organization of production, in terms of a unit of product, are no longer so large.

administrative costs. The company must develop various marketing plans for each market segment, which involves the conduct of additional marketing research, analysis of sales volume, and an increase in advertising costs.

The costs associated with the storage of inventory. Managing a large range of inventories is more costly than maintaining multiple types of merchandise.

Costs associated with promotional activities. Attacking different market segments will require the firm to develop various advertising campaigns and sales promotion activities. As a result, the costs associated with the promotion and use of various media increase.

Since differentiated marketing leads to an increase in both sales and costs, determining its effectiveness is fraught with significant difficulties. Manufacturers need to be careful to avoid dividing the market into too small segments. Otherwise, they may have to do the reverse operation of merging several tiny segments into one.

No market is homogeneous. Of course, one might think that all consumers are the same, but even the most superficial reflection shows that this is not the case. Some people love sweets, others are indifferent to it; some people tend to buy a car, others tend to refuse it; Some people have children, some people don't. There are many more examples that would show in what situations consumers behave differently, but perhaps enough of those that have been given.

Studying the question of whether a product is needed on the market or not, one must begin with an understanding of the essence of the process, i.e., with whether this product is needed by an individual consumer? This type of research establishes the habits, tastes, and reactions of people living within a given market. It helps answer questions about these people's behavior as buyers: who? What? Where? When? How? Why? How many?

Very well, the essence of segmentation, and marketing research, was outlined by R. Kipling in one of his poems:

Studying the consumer helps the manager responsible for promoting products to the market to establish:

• 1) who are the people who make up its market;
• 2) what they want to buy;
• 3) what they need and what they use;
• 4) where they buy the products they need;
• 5) how many products are purchased;
• 6) when they buy;
• 7) how often they buy;
• 8) how they use the products they buy.

To take into account this "stratification" in the market, marketers resort to such an operation as segmentation. Market segmentation- this is the division of a particular market into parts (segments) or groups of consumers that have a steady demand for a particular product, the implementation of which depends on how each of these parts reacts to the product offer, taking into account the activity of marketing promotion tools (advertising, sales forms and etc.).

There are several basic types of segmentation. Traditionally in marketing there are:

• 1) macrosegmentation - dividing the market into segments by regions, countries, levels of their development, etc.;
• 2) microsegmentation - more fractional than macrosegmentation, the division of the market depending on private parameters (characteristics of consumers by income level, age, marital status, etc.).

Market segmentation involves identifying groups that differ from each other in their behavior. At the same time, the market segment is a fairly large part of it; in fact, an enterprise can focus on an even smaller group of consumers. In this case, the following terms are used.

• 1. market niche- a subgroup of consumers within a segment. Although some points make it possible to identify these people with other consumers belonging to the same segment, they are still characterized by some additional features.
• 2. An even narrower concept - local group. Focusing on a local group, the enterprise seeks to take into account the differences in interests and needs that are characteristic of the inhabitants of a particular locality, city, village, district, or even visitors to a particular store. The concept of “local group” is especially important when an enterprise cannot satisfy the needs of the market for a particular product as a whole, and therefore it is natural to decide to limit its activities to a specific territory.
• 3. Individual marketing involves the desire to take into account the interests of one specific buyer. In fact, individual marketing takes place in the activity of a tailor who sews clothes to order. In this case, the tailor seeks to take into account as many features of his customer as possible: height, volume, his aesthetic preferences, intentions regarding the use of the clothes that will be sewn, etc.

An individual consumer is, by and large, the limit of market segmentation, since its further division is simply impossible. There is an opinion that modern production and the technical progress associated with the desire to develop it tend to this limit.

Some businesses are forced to opt for individual marketing due to the fact that their markets include only a few or even one consumer. In particular, aircraft manufacturers are forced to choose such a strategy, since a very small number of organizations and people purchase their products. In the conditions of mass production, one regularity should be taken into account, which operates with a single exception: the narrower the group that the company focuses on, the more expensive the product turns out to be.

Naturally, this generally does not apply to a small enterprise that has limited production volumes due to limited capacities and resources. However, on a larger scale, attempts to take into account private interests lead to a noticeable increase in production costs. For example, in order to bake a thousand identical loaves of bread, certain costs are needed; however, in this case, production will run continuously, since all rolls are the same. When a manufacturer seeks to take into account the interests of customers (for example, he starts baking three types of bread rolls that differ in size), it becomes necessary to reconfigure the equipment, use different forms for baking, etc. As a result, more requirements are put forward for workers, conveyor production must at least rebuild twice.

It makes sense to distinguish between preliminary and final segmentation. When planning to enter the market with a new product, experts proceed from some assumptions about why consumers belonging to one or another group will buy this particular product. Such assumptions are in the nature of hypotheses - provisions that must be tested in the process of marketing research. These provisions are called preliminary segmentation.

Unlike pre-segmentation, final segmentation implies already accurate knowledge of consumer preferences and more accurate assumptions about the success or failure of the project, based on data from marketing research. It is advisable to distinguish between preliminary and final segmentation because our assumptions and assumptions do not always correspond to reality, and therefore they always need to be verified.

In marketing practice, it is customary to distinguish between segmentation of the consumer market and segmentation of the market of organized consumers.

1. Segmentation of the end consumer market is aimed at identifying factors that are significant from the point of view of ordinary consumers - individuals and families. Inclusion in this series of families is due to the fact that a person's needs are not determined exclusively individually, belonging to a family imposes important restrictions on his behavior. In particular, a person who does not have a family can spend money solely on personal needs and entertainment. A person who has a family acquires a number of duties, in particular, the duty to feed, clothe, and teach his children.

Segmentation of the end consumer market. It is carried out on a number of grounds, which are presented in Table. 6. There are a lot of these signs, so usually marketers choose only a few as the basis, those that are the most significant, there can be no single basis for all cases. In practice, marketers have to determine the most important criteria based on the specific situation, i.e., from the characteristics of the product and the characteristics of consumers who may be interested in it.

Reasons for market segmentation

The more features a marketer uses to segment the market, the more segments are obtained. This has both advantages and disadvantages. The main advantage is that with an increase in the number of parameters and segments, the accuracy of predictions increases. However, this increases the amount of information that has to be dealt with and is therefore more difficult to analyze. In addition, excessive detail makes it difficult to select a sufficiently large segment that would fully meet the interests of the enterprise.

Therefore, it is absolutely not necessary to segment the market according to all possible criteria, it is necessary to select the most significant of them. The main task of the marketer in this case is to get exactly the information that is most important. And in many cases, it is enough to take into account only three or four criteria.

2. The market of organized consumers is the market of a wide variety of companies, firms and other organizations. In addition, the same market includes numerous trade organizations that mediate links between the manufacturer and end consumers. Its differences from the end-user market are very significant, first of all, they relate to the goods that are purchased in this market, as well as the volume of purchases. There are also differences in segmentation.

Successful segmentation of the market can be considered the goal of any enterprise. In the conditions of the modern economy, there are too few monopoly markets; in the vast majority of cases, competition is developed to one degree or another in the markets. The fact is that consumers who buy a certain product of a particular brand, as a whole, form a market segment identified on a special basis. It is quite natural that an enterprise should strive to ensure that its market segment is more extensive.

Obviously, market segmentation and the search for an undeveloped segment should be resorted to only if the market as a whole has already been at least partially mastered, mastered to such an extent that there is no shortage on it. In a situation of scarcity, consumers are ready to buy any product, and it may have qualities that do not fully satisfy consumers. Then mass marketing is much more effective.

In this case, the indicators that are most important are not the characteristics of individual consumers, but complex organizations that purchase goods or services to satisfy their own needs. It is clear that the needs of organizations are qualitatively different from the needs of people.

The most important parameters for the market of organized consumers are the following parameters:

• 1) the industry, the field of activity of the company (usually in this case they say three areas: technology, marketing and the financial sector);
• 2) the size of the company: distinguish between large, medium and small companies;
• 4) geographical region;
• 5) technologies used by the company;
• 6) the volume of goods and services that the consumer needs: it can be large and small;
• 7) features of the size and frequency of orders: non-periodic small, non-periodic large, periodic large, periodic small;
• 8) the qualities and characteristics of goods and services necessary for the company: price, quality, service, the possibility of systematic purchases, the obligation (optional) of urgent deliveries;
• 9) features of the use of goods and services at the moment: they can be used widely, limitedly or not used at all; respectively, active users of the product, inactive users of the product and potential (possible) users are distinguished.

There are two grounds for market segmentation, which are directly related to the product and its qualities.

• 1) the benefit that the buyer is looking for. Different consumers may purchase the same product for different reasons. For some, the price is important, for others - the fact that other people buy this product, for the third, quality is most important, for the fourth - some special quality associated with the specifics of the product. So, according to research conducted by marketer R. Haley, there are four main consumer groups of toothpaste buyers: for the first group, cost savings is in the first place, for the second - the therapeutic effect, for the third - the ability of toothpaste to whiten teeth, for the fourth - taste;
• 2) commitment to the product (brand). A buyer who is committed to some product, or rather, to the brand of the product, is ready to purchase it at a higher price; if in one store this brand is not available, he is usually ready to go to another.

Naturally, only approximate bases of division are given here: in fact, they can be different, more or less detailed, fractional. When determining the grounds for division, it is necessary to proceed, first of all, from what signs will be really significant, and to avoid excessively fractional division. The first requirement is clear in itself: improper market segmentation will lead to the fact that the marketing strategy of the enterprise will be ineffective, all efforts will be in vain.

As for the second requirement, it is due to the fact that too much fragmentation of the market as a result of research provides too much diverse information that is difficult to streamline and generalize. Usually, when starting segmentation, specialists have some assumptions about what they are interested in, and have information about what resources are available to the enterprise. Therefore, whenever possible, market segmentation should be aimed at ensuring that it is commensurate with the real needs of the enterprise.

One important recommendation should be made here. When segmenting the market, it is far from always necessary to rely on standard, already existing grounds. As noted researcher Madjaro pointed out, a marketer who is able to discover a new basis for market segmentation can avoid intense competition. And this means that the most profitable for the enterprise is such a basis for segmentation, which is not used by other enterprises operating in the same market.

Suppose that there is a book publishing house that focuses on producing cheap products that are accessible to a wide range of readers. A natural, but wrong decision for another book publishing house would be to focus on the production of expensive book products (for example, gift books). However, in reality, the second publisher will gain much more if it starts publishing books for children, for example, and does not play by the rules that a competitor ultimately sets.

We should not forget about the search for “market windows”. This is the name of the market segment, which for some reason remained undeveloped by other manufacturers of the same type of product. As a rule, "market windows" arise when a new product appears that is simply not able to satisfy the needs of a certain part of the population.

For example, copying equipment was originally created by analogy with printing equipment, and therefore there were only expensive and large equipment on the market. Several Japanese firms took advantage of this by starting to produce inexpensive and less powerful equipment that could be used by small firms and individual consumers. A similar situation was observed in the market for shampoos and pet food. The thing is that traditionally they were washed with the same things that people themselves washed, and fed with ordinary food.

Market segmentation- This is the division of consumers into groups based on certain criteria. The division into segments is necessary to determine the reaction of consumers to ways to promote products or services. The rationale for such a division is that, despite the quality of the product, it cannot be in demand among absolutely all buyers.

The sale of goods is usually heterogeneous. Consumers of different segments do not equally determine which products will be the best for them. Someone focuses on reliability and durability, someone is important economy. In addition to individual preferences for product characteristics, consumer groups differ in terms of income, lifestyle, geographic and other factors. The signs by which segmentation occurs are divided into:

• Psychological and social (lifestyle and behavior, desired benefits, status);
• Demographic (gender, age group, level of education and culture, occupation, religion, nationality);
• Geographic (region, transport network, legal restrictions, level of competition).

Consumers in the same market segment have one or more similar criteria that determine their behavior as buyers. The consumer group is a large part of the market. On its scale, several manufacturers compete with each other. The success of the company in the competitive struggle directly depends on the correct choice of the target audience segment. The main purpose of market segmentation is to assess the situation and needs of buyers in each segment.

Criteria for selecting a segment for an enterprise

In order to correctly determine the group of consumers of products, it is important to consider the criteria by which the company is divided in the market. The criteria for identifying an appropriate segment for conducting business activities include the following factors:

• The size or capacity of a market segment. This criterion is determined by the total sales for a specific period of time or for the entire life of the product. The audience is selected with higher cost-effective parameters.

• Availability of the group for the company. The criterion is characterized by the probability of the manufacturer or seller to get into circulation certain distribution channels for products. As a rule, the company chooses the market segment that is more accessible by most parameters.

• Segment perspective. The stability and longevity of the market group is important for the company. A growing segment is chosen as the target audience, giving confidence in the length of their lives in the future.

• segment profitability. According to this criterion, the activity of the enterprise is evaluated.

• within the segment. The sign allows you to assess the readiness of competitors to give up part of the market in the designated segment, and how much their interests will be affected.

• performance in this segment. Evaluation of the criterion helps to determine whether the enterprise has enough resources to work with the segment and whether the products will be in demand.

• Compliance of the market segment with the goals of the enterprise. Work in the selected segment must be fully consistent with the strategy of the enterprise.

The target audience cannot be determined by only one criterion, as a rule, the assessment takes place on several grounds. The selected segment is not always the largest on the market, much more attention is paid to its future development. For one company, several segments can be selected to carry out activities.

Market segmentation (SR) is the division of the target audience (TA) into groups. Each of the groups includes consumers with the same characteristics and needs. This is essential when developing a marketing strategy. Allows you to see the needs of all consumer groups and satisfy them.

What does market segmentation mean?

The company in the production and sale of products can focus both on all segments and on individual groups of consumers. Segmentation allows an organization to determine its place in the market. Its main goal is to increase sales of products, targeting various consumers in the development of goods.

Segmentation is divided into two stages:

1. macro segmentation. At this stage, the market in which the product will be sold is determined.
2. Microsegmentation. Within a certain market segments of consumers are determined. That is, a search for small market segments is carried out to form an effective marketing strategy.

Working with small groups of consumers allows you to find more subtle marketing tools.

Market Segmentation Goals

Market segmentation is a tool that should not be ignored. Its efficiency is very high. Consider the goals of market segmentation:

• Product development based on the needs of the target audience.
• Satisfying the needs of the consumer.
• Formation of competitive advantages.
• Orientation of the marketing strategy to the actual consumer.
• Formation of scientific and technical base on the basis of existing requests.
• Transition to a narrow segment with low competition.
• Orientation to the consumer.

Market segmentation is a tool that is suitable for both small and large companies.

Stages of segmentation

Segmentation accuracy is critical. This affects the effectiveness of the marketing strategy. If consumer groups are not defined correctly, it will be impossible to find an adequate method to increase sales. Consider the stages of market segmentation:

1. Research of the company's market resources.
2. Formation of segmentation criteria.
3. Segmentation.
4. Market research.
5. Formation of a strategy for the company's behavior in market conditions.
6. Selection of specific market segments.
7. Product positioning.
8. Formation of a marketing strategy.
9. Organization of the company's work in a new segment.

At the stage of preliminary segmentation, the maximum number of suitable market segments is studied. At the stage of final segmentation, a limited number of segments are explored in which it is planned to continue work.

Selecting a specific segment

As a rule, the company specializes in 1-2 segments. More segments are not recommended. This will reduce the targeting of sales. Once a segment is selected, there are 5 possible actions:

1. Focus on one segment.
2. Work on satisfaction of one need, characteristic for all groups of consumers.
3. Work on meeting all needs within the same group.
4. Concentration on several segments.
5. Meeting the needs of the entire market.

ATTENTION! The most effective marketing method is to focus on one group.

Market Segmentation Criteria

Segmentation criteria are indicators that allow you to determine the reasonableness of choosing a particular group. They can help inform your marketing strategy. Consider the main criteria, as well as their characteristics:

• Consumer feedback differentiation. Representatives of each group should respond to the proposed product in a similar way.
• Adequacy. The volume of products that can be sold within a given time period is determined. At the same time, such indicators as the number of consumers and the area of ​​the selected segment are taken into account.
• Availability. Resources are determined to expand the area of ​​product sales.
• measurability. Availability of resources to research segment size.
• materiality. Each group is analyzed to see if it can be considered as a segment.
• Compatibility. The degree of compatibility of the segment with the market captured by competitors is checked.
• Profitability. The profitability of working with the selected group is determined.
• Competition. The level of competition is analyzed.

You can select all or several criteria for analysis.

Signs of market segmentation

There are the following signs of segmentation:

• Geographical. The market is divided geographically. That is, the company chooses in which geographical area the products will be sold. This takes into account the climate of this area, population density, characteristics of consumers. For example, it does not make sense to count on a large demand if warm jackets are sold in areas with a very warm climate.
• Demographic. Representatives of the target audience are divided into groups according to the following criteria: gender, age, marital status, income level, education, and so on.
• psychographic. The group is classified on the basis of the following features: lifestyle, status, personality traits. Segmentation based on personality types is possible. For example, consumers are divided into introverts and extroverts. Depending on the type of personality, the optimal way of influencing the consumer is selected.
• Consumer motives. At this stage, consumer preferences are determined, prioritization when making a purchase. It is desirable to define the value system of the target audience.
• Behavioral. The actual behavior of the buyer is analyzed. For example, the volumes of purchases that are made by the consumer are determined. Loyalty scores are calculated.

The listed features make it possible to divide the existing target audience into groups.

Development strategies taking into account market segmentation

Based on market segmentation, a further development strategy is determined. You can choose one of the following strategies:

• Unified. In this case, segmentation practically does not play a role. The advertising strategy will be homogeneous. When developing and implementing a product, they are guided by the most common features of the consumer. This strategy is relevant for those cases where the product does not have distinctive features.
• Differentiated. A specific product is selected for each group of consumers. The distinctive features of this method are a higher probability of making a purchase, a higher cost of goods.
• concentrated. Several groups of consumers are selected, and all the efforts of the company are concentrated on them. The differences of this strategy are: the increased potential of the market, the prestige of products, the provision of increased profitability of production. The strategy is suitable for highly specialized industries.
• Atomization. CA is divided into the smallest units. The division limit is an individual consumer. This strategy makes sense when selling expensive products.

The choice of strategy depends on the characteristics of the company and the product itself.

Market Segmentation Example

The company is engaged in the production of protein shakes. Segmentation is carried out in order to increase sales. The research method determines the groups that purchase products. This:

• Women who want to lose weight
• Women trying to gain muscle mass.
• professional bodybuilders.

The company is quite small, and therefore it is subject to competition. To reduce competition, a decision is made to select one group. In this case, this group will be professional bodybuilders. The choice is due to the fact that this group needs high-quality sports nutrition, but few manufacturers are focused specifically on professional athletes. Products are tailored to the needs of a particular group.