Demographic and Geographic
These are many ways to segment a market but some of the more familiar ways are presented and discussed here. Some of these segmentation methods may coincide with the answers to your initial probing questions or they may assist you in answering some of the probing questions.
Demographic segmentation is one of the most used forms of segmentation. It is used to divide the market based on characteristics such as age, education, income, family size, race, gender, occupation, and nationality. In many instances, this is the first segmenting criteria used. When you think of ‘toys’ what comes to mind? The toy industry segments based on age and produces baby, children, and adolescent toys. Similarly, the fashion industry segments based on gender and age and produces chic fashion for younger prospects and a more formal and elegant clothing for older individuals. The housing market is segmented by income and family size while the disposable razor market is segmented by gender. Obviously other criteria are combined with demographic criteria to develop more nuanced segmentation profiles, but demographic segmentation is a primary criterion.
Geographic segmentation creates different customer groups based on geographical boundaries. People living in the same environment tend to have similar needs and wants, while people in different geographical locations may have different needs and wants. These differences may be based on climate, terrain, location, or population density. For example, people who drive cars in Boston and New York need snow tires for their vehicles while those who live in Miami do not. Depending on the size of the business it may be necessary to segment based on country, state, or city. For example, many search engines curtail their content based on country so that different search results are shown to only people that live in a certain country. Home security companies segment based on country, states, and cities. Lawn care companies may only focus on a specific city while a pizza shop may only deliver to a specific zip code. The decision to use geographic segmentation will depend on the size and characteristics of your business.