Nike had all along been serious about helping professional athletes get better, through its footwear and apparels. In selecting Basketball as a segment, Nike identified commonalities between running and basketball; both were professional sports which involved running, and both demanded shoes which could help athletes perform. Within the basketball segment, Nike chose to focus on young athletes as their target segment. In 1984, Nike decided to sponsor future basketball legend, Michael Jordan, then aged 21. Nike was the least concern with selling to these professional players. What they were pursuing was the fanbase of young athletes who desired to wear the same shoes as their idols. Jordan as a brand, targets young customers from 13 to 30 years old, who loved basketball or liked the design of Air Jordan shoes. In the basketball arena, Nike wanted to be positioned as a performance shoe.
From the case study above, market segmentation is crucial. Because it makes it simpler to concentrate marketing efforts and resources on targeting the most valued consumers and attaining corporate objectives. There are many ways to segment markets to find the right target audience. By using market segmentation, you may learn more about your clients, pinpoint needs within your market segment, and decide how to best satisfy those needs with your goods or services. This aids in the creation and implementation of superior marketing plans. Understanding your target market’s needs and figuring out how to effectively address those needs with your product or service are all made more accessible by market segmentation. With marketing segmentation, we can strengthen the marketing messages, determine the most successful marketing strategies,create highly targeted adverts, and many more.
One of the most well-liked and frequently employed types of market segmentation is demographic segmentation. It refers to numerical information on a population. Demographic segmentation assumes that people with common characteristics have similar lifestyle patterns, tastes, and interests that influence their purchasing habits. Demographics are often combined with other segmentation approaches to develop target markets most likely to buy their products. Demographics include age, gender, occupation, income, and education. Since demographic data is statistical and real, it is typically simple to find using different websites for market research. The advantage of demographic segmentation is that it is easy to collect. Government sources, including the Bureau of Labor Standards, provide household, income, education, and health data for marketing strategy and business goals.
Psychographic segmentation examines consumers and categorises them based on psychological traits such as personality, lifestyle, social status, activities, interests, opinions, and attitudes. Psychographics is an excellent complement to demographics because they identify the motivations behind why people make particular choices. Due to their subjectivity, psychographic segmentation criteria are a little harder to pinpoint than demographic ones. They take the investigation to identify and comprehend because they are not data-focused.
Behavioral Segmentation describes specific steps in their ideal customer’s buying process, including what their ideal customers want, why they want it, the benefits sought, and how they meet their needs. Behavioral segmentation is used to study B2C and B2B market segments. Companies can better target their marketing messaging when they understand why people buy. The technique of classifying and grouping clients according to their actions is known as behavioral segmentation. These behaviors include the kinds of goods and materials people consume and the frequency with which they connect with a particular app, website, or company. When marketers know why consumers or businesses are buying their products, they can make it part of their marketing strategy to address those behaviors.
The most straightforward kind of market segmentation is geographic segmentation. Geographic segmentation allows marketers to group people based on where they live, work, or travel. The location significantly influences buying habits marketers can use to develop their marketing messages. Marketers use various geographic segmentation variables, including the country, region, state, province, town, climate zone, or zip code. Culture and population density (urban or rural) are also crucial variables to include in their market research. These location variables will influence what problems people have in that region and how marketers can solve it. Geographic segmentation can refer to a specific sort of territory or a clearly defined geographic border (such as a city or ZIP code) (such as the size of the city or type of climate).
Firmographics explain their business target market characteristics, including their industry, number of employees, legal status, company size, financial standing, and other business-related variables. Firmographic data is available through online sources like federal and state government websites, trade journals, and other industry sources. Marketers also use surveys to collect specific data about their B2B target market. Firmographic data examples include: Industry classification, Ownership and Legal Status, Years in Business, Number of Employees, Location, Customers and Products, Market Size.
Companies invest crucial resources into understanding their ideal customer’s problems to solve those challenges with valuable products and services. Market segmentation is the basis for successful product concepts, launches, marketing messages, advertising, and other critical marketing activities. Companies have great ideas for new products, but they must determine if those ideas solve a problem for their target audience. Without market segmentation, companies will waste time and effort on a product that sounds good but doesn’t sell.
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