Market Segment is a group of people or businesses that have some common characteristics such as shopping preferences, age, region, interests, and so on. From a commercial and marketing point of view, such a group with a different combination of these common characteristics is called the market segment.
Why do we need market segments?
Nothing on the market is meant for everyone. With each of its products, a company is focused on a particular part of the market, that is on a certain market segment which should be reached out for. The method used in order to analyze and search for the right groups of potential customers, is called market segmentation.
What are examples of market segments?
There can be a nearly infinite number of market segments, each of which is unique in some sense. They are linked by one or more common characteristics - age, gender, income, education, region, interests, and so on. Here are some examples of segments:
- Small and medium-sized businesses up to 50 employees providing services in the English-speaking countries
- Grocery stores in southern London
- Women with secondary education who own a dog
- Youth aged up to twenty years attending high school in France
What are the most common characteristics of market segments?
- Geographic, Regional
- city, town, district
- marital status
- income, income group
- Job positions
- values, etc.
- interests, interest categories
- Shopping Behavior
- frequency of purchases and the amount of money spent
- loyalty to the supplier
- attitude to risk
The following are typically used for businesses:
Type of organization * sector, * branch or business sector * size of organization - number of employees (of a company) * turnover * Operating Characteristics * production type * organization of purchases * delivery urgency, e.g. JIT * Shopping Behavior * Purchasing policy of the organization, (purchasing strategy) * purchasing criteria, etc.