Retail Marketing Segmentation. MBA Marketing Study Material.

Segmentation is one of a very dynamic and expedient tool for marketing. This post is an effort to clarify what is a segmentation and how the segmentation is beneficial for retail business practices to gain competitive advantage.

What is Market Segmentation?

Market Segmentation is a dissemination of total market into small groups according to some communal features to approach a target market for potential customers. The aim of segmentation is to identify a group with an uppermost probability buy products or services and organization can direct all marketing efforts to that group.

Retailers can be relish by adopting the market segmentation process in their business to attract customers and sustain them for a longer period of time.

Segmentation Process in retail Marketing:

Below figure can make you clear about the overall process of market segmentation.

Parameters of Retail Market Segmentation:

1.      Geographic Segmentation:

Dividing a market into a subgroup according to geographic place is called as a geographic segmentation. This segmentation can be done with the location of city, country or region, a climate of location, size of the population or through the density of area market can be divided into urban, suburban, rural etc.

2.      Demographic Segmentation:

Demographic segmentation consists the process of dividing a market into sub-segments according to age, gender, religion, language, income, marital status, education, occupation, employment or culture etc.

3.      Psychographic Segmentation:

In this type of segmentation, a market can be divided into a subgroup according to the psychology of customers. Subgrouping can be done in this segment through analyzing interest, hobbies, lifestyle, values, and ethics, learning involvement, perception, and attitude of people.

4.      Behavioral Segmentation:

In behavioral segmentation, retailers need to analyze the curiosity and behavior of people while purchasing a product or services by segmenting a market into a subcategory. A market can be categorized by frequency of purchase, user status or user rate etc. It can be divided into a subgroup of loyalty status or awareness about product or service etc.

Above are the common parameters of segmentation which can help to focus on marketing efforts.