Get Backed, Get Big, Get Bought by Colin Barrow

Author:Colin Barrow
Language: eng
Format: epub
Publisher: Wiley
Published: 2010-05-11T00:00:00+00:00

Types of market segments

These are some of the most popular ways to divide up markets: • Geographic segmentation: This is when companies present their products and services differently in different countries or regions. At its simplest this could involve translating literature or pricing similar products differently. A recent example is Google’s G1 mobile phone, launched in 2008 and priced higher in Europe than in the US, reflecting the difference in both cost structures and competitive environment.

• Benefit segmentation: This approach recognises that different people can get different satisfaction from the same product or service. Lastminute.com claims two quite distinctive benefits for its users. First, it aims to offer people bargains that appeal because of price and value. Secondly, the company has recently been laying more emphasis on the benefit of immediacy. This idea is rather akin to the impulse-buy products placed at checkout tills, which you never thought of buying until you bumped into them on your way out.

• Psychographic segmentation: Here individual consumers are divided into social groups such as ‘Yuppies’ (young, upwardly mobile professionals), ‘Bumps’ (borrowed-to-the-hilt, upwardly mobile, professional show-offs) and ‘Jollies’ (jet-setting oldies with lots of loot). These categories try to show how social behaviour influences buyer behaviour. The most infamous of these categories is ‘ninja’ borrowers - no income, no job, no assets - who were tempted into home ownership, particularly in the US, with interest rates of 1 per cent, but which they had no serious hope of paying when rates later peaked at 5.25 per cent.

• Industrial segmentation: Here commercial customers are grouped together according to a combination of their geographic location, principal business activity, relative size, frequency of product use, buying policies and a range of other factors.

• Multivariant segmentation: This occurs where several variables are used to give a more precise picture of a market than using just one factor alone.

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