Bases for segmentation

by smartamarketing

There are many ways that can be used to segment markets.  I tend to  focus on buyer/consumer segmentation, but other approaches which are used (often in parallel with consumer segmentation) are:

  • Buying Category – for example in the Restaurant and Hospitality Industry that Springhill Country Guest house operates in marketers could base segmention on categories such as:

Hotels – large/small; chain or franchise; State/City/country

Pubs – large/small; State/City/country

  • Distribution Channel – For example Chains; Pharmacy; Newsagents; vending machines; retail/wholesale
  • Demand and Growth Related Attractiveness  Is the segment sufficient in size?  Will it grow further?
  • Size Segments should be generally large enough to warrant the investment in targeting them with a new offer.  They should remain attractive over a reasonable period of time to enable payback of investments.
  • Competition Related Attractiveness  One of the goals of market segmentation is to identify a profitable or strategic opportunities for the organisation.  Segments that have a high degree of competitive activity may not be attractive.
  • Resource Related Attractiveness   Organisations need to consider how they can utilise their limited resources to best target and service each segment.
  • Accessibility An organisation must be able to reach or access the segment, either with a design product offering or specific communications.