Market Segmentation, by definition, "is the process of dividing a market into meaningful, relatively similar, and identifiable segments or groups" it is definitely crucial for a business to target these groups because it helps decision makers accurately define marketing objectives and to better distribute the available resources.
Here I have severely severed and broken down the four basic criteria to have a useful and successful segmentation:
1. Substantiality : the segment must have enough potential buyers so there is more potential to have profits
2. Identifiability and Measurability : there needs to be enough data about the section that includes basics like how many or age ranges.
3. Accessibility : The target markets must be easy and available to contact
4. Responsiveness : one must know what their targets respond to. If you are trying to offer different price ranges to people who have one price level set, that would be irrelevant because they will not respond to different prices.
Segmentation Variables is when characteristics of individuals, groups, or organizations are used to divide a total market into segments.
- Geography : by region of a country or the world, market size, market density, or climate.
- Demographics: with age, gender, income, ethnic, family life cycle
- Psychographic: personality, motives, lifestyles, geodemographics
- Benefits: the process of grouping customers into market segments according to the benefits they seek from the product
- Usage-Rate: divides a market by the amount of product bought or consumed.
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