Market Segments and Target Markets

Customers can be divided into groups who have similar characteristics – a ‘market segment’.  Ways of segmenting a market include by:

• Age e.g. child, teenager, adult
• Gender e.g. male, female
• Income e.g. low, middle, high
• Life style and interests e.g. health conscious, vegetarian
• Geographical location e.g. urban, rural
• Socio-economic class e.g. upper, middle, working class.

Customers in a market segment may have similar requirements which means organisations can target markets by offering different product versions, different prices, sold in different places, using different promotion methods.

Benefits of Target Marketing:

• Tailoring of products will be more appealing to that particular group of consumers because it needs their needs and wants. This will help increase sales.
• Spreading the risk of failure by having a range of products as the business is not reliant on demand for a single product and/or from a single target market.
• Sale of products in the most appropriate places to reach the chosen target audiences. This can maximise sales.
• Tailoring of marketing and promotion techniques entices a businesses target market. It also stops money being wasted on activities that are not appropriate to certain market segments.