Market
segmentation is a process of dividing the prospective consumer base of a product into separate
groups so that the product and the way it is sold can be altered to make it more appealing to
each segment.
The changes that could be made in the product can include its
features, price, accessibility options, etc. The price of the product can also be changed to
suit the consumers of each segment. To do this only the features that are most used by consumers
of the segment can be kept and the others removed. Advertising can also be a targeted one with
separate advertisements created for each segment and shown on media that would be most likely
to influence them and for which the company would have to make the least expenditure.
For example, a company selling smart phones could increase the popularity of its phones
by the use of market segmentation. Let us assume the different market segments they identify is
one consisting of young teenagers, one that has business users and one with those who would
prefer a relatively less expensive model. The model for the first group can be altered to make
it appropriate for use with games, the social media and music. The model for the second group
could have more business appliactions and a higher processing speed and the model for the budget
buyer could cut down on the high end features and use a less powerful processor, decrease the
memory and the resolution of the camera. For the marketing of the three versions, the first
model's campaign could rely predominantly on the social media, the phone for the business users
can be show-cased at corporate events and through a reduction in price if a large number is
bought by a single company, and the low end phone can be advertised in discount stores and in
areas where people are not very well off and would prefer a low cost smart phone even without
high-end features.
In the example describes above you will see the use of
geographic, demographic, psycho-graphic, and behavioral segmentation.
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