May 09, 2020 market segmentation is a process of dividing the market of potential customers into different groups and segments on the basis of certain characteristics. Geographical segmentation also provides a means of dividing a market into sales regions and then subdividing them into sales territories to assist with the efficient deployment of sales representatives to service customers. A marketing strategy created by dividing the target market into segments on the basis of factors such as economics, food habits, clothing trends, languages, traditions and many other traits, is known as geographic segmentation. Market segmentation definition, importance, advantages. Cornell university school of hotel administration the. Market segmentation is a much broader concept, however, and it pervades the practice of business throughout the world. Tourism market segmentation is the strategic tool for getting a clear picture of diversity among the tourists. Market segmentation is the process of dividing up mass markets into groups with similar needs and wants. Geographic segmentation is the market segmentation strategy in which the market is divided on the basis of regions or geographies. The tourism researchers and the tourism industry use market segmentation information to study the opportunities for competitive advantage in the marketplace. Segmentation definition, basis and nivea case study 1. Marketer will identify the customer need and want then only decide if it is practical to develop marketing mix to satisfy those wants. Basic explanation of demographic segmentation with.
The geographic segmentation approach is popular for a number of valid reasons among ntos. To accomplish this goal, an ideal marketing tactic is necessary. Market segmentation 223 globalization of business expands the scope of operations and requires a new approach to local, regional and global segments. At the heart of successful market definition is the concept of a prospect a person who might conceivably part with their money for the right to acquire and use some version of your product category. American journal of business education june 2011 volume 4.
If the market segmentation is based on geographic units, it is called geographic segmentation. This type of segmentation helps to reach out to customers living in a similar region or area and have. Demographic segmentation is market segmentation based on various demographic factors, like age, gender, social class, etc. If a firm is selling a product such as a farm equipment, the geographic location will remain a major factor in segmenting the target markets because their customers are located in. Moreover, businesses that have not traditionally embraced marketing in general or segmentation in particular, see. Market segmentation in which consumers are grouped according to demographic variables, such as income and age, and identified by a geographic variable, such as post code or zip code. The member of these groups share similar characteristics and usually have one or more than one aspect common among them. The advantage to marketing management is that this technique divides total demand into relatively homogeneous segments which are identified by some. Geographic segmentation is often used in marketing, since companies selling products and services would like to know where their products are being sold in order to increase advertising and. Basic explanation of demographic segmentation with examples. The definition of geographic segmentation with examples.
Market definition, market segmentation and brand positioning greg allenby ohio state university. Geographic segmentation is a process of grouping customers based on where they live. Geographic segmentation allows large companies to target the varying wants and needs of customers in different regions. Geographic segmentation is an effective methodology used by organizations with large national or international markets to better understand the locationbased attributes that comprise a specific target market. Increased brand value of the organization in the eyes of the customer. You can geographically segment a market by area, such as cities, counties, regions, countries, and. Collecting and analyzing information according to the physical location of the customer or other data source. As per the dictionary of marketing terms, geographic segmentation definition is as follows. Psychographic segmentation advantages apart from the obvious advantage of increased sales, there are a few other intricate advantages of psychographic segmentation as well.
The rationale for market segmentation is that in order to achieve competitive advantage and superior performance, firms should. The four criteria used in the segmentation process is geographic, demographic, psychographic and behavioral. This marketing tutorial provides explanation of geographic segmentation with examples. The management can respond to meet changing market demand. See how you can leverage market segmentation by learning. In this blog, we discuss the definition, characteristics, and examples of geographic segmentation. Geographic segmentation prospective customers are in local, state, regional or national marketplace segment. Segmentation definition, basis and nivea case study. Geographical segmentation for consumers the geographic segmentation signifies a market divided by location. Demographics can be segmented into several markets to help. Geographic definition of geographic by merriamwebster. Market segmentation bases for segmenting consumer markets geographic demographic age, gender, family size and life cycle, or income psychographic social class, lifestyle, or personality behavioural occasions, benefits sought, user status, usage rate, loyalty nations, states, regions or cities.
Market segmentation is a crucial marketing strategy. Abstract excerpt almost any marketing textbook will tell you that the key to successful marketing can be summed up by the stp strategythat is, segmentation, targeting, and positioning. The report illustrates the application of the major analytical strategic frameworks in business studies such as swot, pestel, porters five forces, value chain analysis and mckinsey 7s model on. The word demographic is derived from demography, meaning the study of population.
Segmentation, demographic, psychographic and behavioral. Marketing segmentation can be based on any factor, like culture, economic status and geographic differences. Geographic segmentation is a marketing strategy, whereby, prospective buyers are divided on the basis of geographic units, like cities, states, and countries. Geographical segmentation is a marketing tactic in which prospective consumers are divided on the basis of geographic units, such as cities, states, countries, etc. It focuses on the definition, basis of market segmentation and issues related to market segmentation in detail. Mar 22, 2018 geographic segmentation is the market segmentation strategy in which the market is divided on the basis of regions or geographies. Psychographic research can identify similar values, attitude, and lifestyle or personality groups, but the two main variables used in psychographic. Because potential customers have needs, preferences, and interests that differ according to their geographies, understanding the. May 05, 2018 geographic segmentation is a process of grouping customers based on where they live. At any time, in any geographic region, buyers and seller.
Companies segment their target market geographically when needed to focus on a specific area. Why it should be implemented recommendations 15 use benefit segmentation to market specific products to the customer 15 use geographic segmentation to market to a specific area 16 use psychographic segmentation to market to a specific lifestyle 17 managerial implications 18. To increase your customer base through geographic segmentation, you need to approach people who know a lot about the local geography. 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. Geographic definition is of or relating to geography. Geographic segmentation is based on the belief that consumers who live in the same region share some related wants and needs and those wants and needs could be very different from the consumers who are living in other regions of the world. While typically a subset of demographics, geographic segmentation is typically the easiest. Market segmentation is a marketing term referring to the aggregating of prospective buyers into groups, or segments, that have common needs and respond similarly to a. Market segmentation when the term market segmentation is used, most of us immediately think of psychographics, lifestyles, values, behaviors, and multivariate cluster analysis routines. Consumer behavior market segmentation tutorialspoint. It refers to statistical data about a group of people. Market segmentation is the process of dividing a target market into smaller, more defined categories. One of the most basic forms of market segmentation, geographic segmentation divides the market based on the units of geography such as location, languages used and other such basic elements which separate one geography from the other. Geographic segmentation can be classified by parameters like countries, states, cities, villages, urban rural, climatic conditions, density of population.
Geographic market segmentation tends to optimize the marketing strategies of a business by matching products and services to different regions, cities and countries. There are many reasons as to why market segmentation is done. Geographic segmentation is when a business divides its market on the basis of geography. Geographic segmentation involves selecting potential markets according to where the y are located.
Demographic segmentation is market segmentation according to age, race, religion, gender, family size, ethnicity, income, and education. Geographic segmentation creates different target customer groups based on geographical boundaries. The critical intent of any organization is to make a profit. This research paper will provide information about the knowledge gap and will show a path for future research in the area of market segmentation, which. Geographic market segmentation is done considering the factors such as tourists place of origin. For example the uk and the usa are both very different markets, with different values, attitudes and lifestyle. There are several ways that a market can be geographically segmented.
Market segmentation is the process of dividing prospective consumers into different groups depending on factors like demographics, behavior and various characteristics. This segmentation helps organizations understand consumer behavior accurately that in turn helps them perform better. This research paper will provide information about the knowledge gap and will show a path for future research in the area of market segmentation, which is the heart of marketing now a day. Moreover, businesses that have not traditionally embraced marketing in general or segmentation in particular, see it as imperative for success and even survival. This factor is important as the tourists belonging to different places are brought up with different cultures and show different traits of behavior. Basis of segmentation geographic dividing the market into different geographic units nations, states, regions, cities, towns etc. Psychographic segmentation is a method of dividing markets on the bases of the psychology and lifestyle habits of customers. Using different types of market segmentation allows you to target customers based on unique characteristics, create more effective marketing campaigns, and find opportunities in your market. Although the general trend in tourism marketing research has constantly been developing toward datadriven a posteriori, posthoc.
Market definition, market segmentation and brand positioning. Market segmentation is a process of dividing the entire market population into multiple meaningful segments based on marketing variables like demographics age, gender etc, geographic, psychographics lifestyle, behavior etc. May 24, 2019 market segmentation is a marketing term referring to the aggregating of prospective buyers into groups, or segments, that have common needs and respond similarly to a marketing action. Demographic segmentation is one of the most popular and commonly used types of market segmentation. It helps the firm divide the market into several segments or groups, each having a common variable, and target each of these. Demographic segmentation examples include age, gender, income, religion, race and nationality.
Samsung group report contains a full analysis of samsung segmentation, targeting and positioning and samsung marketing strategy in general. The data collection is the main step to increase customer base. Demographic segmentation is defined as a market segmentation method based on variables such as age, gender, income etc. This segmentation approach may consider variables such as climate, terrain, na tural. Within each of these types of market segmentation, multiple subcategories further classify audiences and customers. Today, segmentation is no longer a simple, or static, marketing technique. The demographic segmentation by starbucks is between 25 and 40 years of age with high incomes, the.
Geographic segmentation definition, importance, advantages. Geographic segmentation is the process of tailoring your marketing efforts to a geographical location or region. The pros and cons for destination marketing abstract market segmentation is a widely applied concept in destination management. It not only uses demographic segmentation in terms of gender, income, age, and ethnic background but also employ geographic segmentation drawing upon country or region of the world and its market size in that specific region and climate.
A simplified explanation of geographic segmentation with. Geographic market segmentation tends to optimize the marketing strategies of a business by matching products and services to different regions, cities and countries where the customers live. Its aim is to identify and delineate market segments or sets of buyers which would then become targets for the companys marketing plans. Develop strong positions in spealized market segment.
152 384 571 7 294 124 77 193 1047 5 360 826 851 1013 1388 95 729 576 1242 1546 587 1176 1440 1471 1302 543 200 784 761 978