Nineteen diverse market categories outlined through segmentation
Understanding the 22 Types of Target Markets in Business
Marketing strategies are more effective when they are tailored to specific audiences. To achieve this, businesses often segment their target markets based on four major bases: Demographic, Psychographic, Behavioral, and Geographic. Each of these bases can be further divided into specific subcategories or characteristics, as outlined below.
Demographic Segmentation
This is the most traditional and widely used segmentation method, focusing on measurable characteristics of a population such as age, gender, income level, education level, family size, occupation, ethnicity, and location. For example, Hewlett Packard printers can have different target markets based on usage types, while Rolex is an example of a product that keeps the target market based on income.
Psychographic Segmentation
This type of segmentation delves into consumer lifestyles, values, interests, and personalities, providing deeper insight into motivations and preferences. Adidas, Reebok, and Nike all market based on one consumer activity - staying physically fit. If a customer is interested in collecting shoes as a commodity, they might buy brands like Jimmy Choo.
Behavioral Segmentation
Classifying consumers based on their interactions with and usage of products or brands offers cues for targeted marketing. For instance, there are three types of customers based on brand preference: brand loyal customers, brand aware customers, and unaware customers.
Geographic Segmentation
Breaking the market down by location and environment factors is useful for tailoring products and messages to regional needs. Umbrellas and sunscreens are products that are marketed based on situational usage, while many FMCG companies or small retailers and dealers target their customers based on zip code.
These 22 types collectively enable businesses to form nuanced target markets that make marketing campaigns more efficient and impactful by addressing the specific characteristics and needs of each segment. For example, Cadbury Dairy milk, Archies, and Hallmark cards are examples of brands that market based on occasions, while marketing to OEM's and Government is a type of target market that is based on decision making.
Positioning is important in targeting a market, as not all brands can be number one, and even being number five with fewer resources can be a good position. People's opinions vary on what magazines or blogs they follow, and water purifiers can be marketed to both individuals and organizations, with different target markets for each.
In psychographic segmentation, the type of target market can be based on consumers' activities, interests, and opinions. Understanding these segment types can help businesses to precisely define and reach their target audiences, making their marketing efforts more effective and successful.
Businesses often use demographic and psychographic segmentation in their marketing strategies to reach specific audiences effectively. For instance, Hewlett Packard may target different demographic segments based on usage types, while Adidas might focus on consumers who value staying physically fit for psychographic reasons. Understanding these segment types can help businesses tailor their marketing strategies to match the characteristics and needs of their target audiences.
