Definition & Types of Market Segmentation

Fri, 03/14/2014 - 00:40 -- Gulzar Ahmed

Market segmentation refers to sub dividing a market keeping in view some commonality, similarity, or kinship. Market Segmentation is considered one of the most important pillars of marketing strategy.

Definition of Market Segmentation

We can simply define market segmentation as “dividing the whole market into different smaller groups of customers with their distinct needs, characteristics, or behavior that might require different products, services and marketing strategies”. For example different cellular companies now a day design different cell phones for boys and girls, different classes of airline services like economic class and business class.  The purpose of segmentation is the concentration of a company on the subdivision or market segment to gain a competitive edge within the segment.  Concentration of a company on particular segment is actually essence of all marketing strategy. Market segmentation is the conceptual tool to help in achievement of organizational goals and objectives.

Types of Market Segmentation

Let’s discuss different types of market segmentation by having special focus on consumer markets rather than business markets.

definition and types of market segmentation

Distribution Segmentation

As name indicate that distribution segmentation done on the basis of company’s marketing distributions channels. Company can make available their products in different markets through different channels of distribution. Distributional segmentation is common, especially among those companies which grant each channel a unique brand. Examples of distributional segmentation is a hair shampoo sold only through upscale beauty salons or an upscale line of clothing sold only in expensive department stores.

Geographic Segmentation

This is the common type of market segmentation in which companies segment the market by targeting a restricted geographic area. For example a company may choose to market their particular brands in certain countries, but not in others. Many restaurants focus on a limited geographic area to provide their service and generate more profits. Geographical differences in customer preferences provide a basis for geographic segmentation.  A leather jacket company might only market its products in areas cold climatic conditions. Some common examples of geographical segmentation include warm areas or cold, urban or rural, high-humidity areas or dry areas, and so on.

Media Segmentation

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