Introduction
The consumer market consists of people, organizations, and consumers with needs wants and the spending capacity to meet the specific needs and wants they face. Nonetheless, it is highly improbable to find a market in which the needs of all the buyers are identical. It is inherent that the marketing program applied for a certain market takes into account the peculiar needs and abilities of each targeted customer. Identification of the inherent differences between consumers in a given market is referred to as market segmentation, a process that reveals the segments to be competitively pursued as the target markets. While it is difficult to categorize each consumer into a rigid market segment, given the diversity of actions taken by each, appropriate market segmentation fitting customer’s requirements leads to improved marketing efficiencies. Nonetheless, market segmentation is only successful with the assurance on the meeting of certain criteria such as ensuring the measurability of the segmentation bases with available data. Further, the segments identified must be exploitable through existing marketing channels while at the same time being inclusive enough to turn in profit. Following is an exercise at market ‘self-segmentation,' where market segments applicable are identified, their impact on marketing, as well identifying how the hierarchy of needs influences spending in each of the market segments.
Market segments into which I fit
Geographic Segmentation
Geographic location affects all consumers and is as such an inevitable market segmentation variable since the spending patterns of an individual depend in a large part upon their geographic location. Segmentation due to geographic location allows classification of potential customers through the effect of factors such as climate, population density, market size, as well as political jurisdictions and the applicable legislation in each jurisdiction (Moormann & Palvolgyi, 2013). This differentiation is especially crucial for companies that utilize the climate in determining potential markets, such as companies specializing in items such as boats and snow shovels.
Demographic segmentation
This segmentation is also critically crucial to all marketing departments, given that it is readily applicable to all consumers, while at the same time minimally affecting buying patterns observed. Using demographic market differentiation, pertinent factors for consideration include age, gender, disposable income, ethnicity, as well as family differentiation. Under demographic differentiation, critical demographic groups assessed include tweens and the baby boomer generations, with each targeted demographic assessed for the spending potential of its members.
Psychographic segmentation
Customer differentiation into psychographic segments utilizes customer lifestyles as well as their values and belief systems. Market segments applying psychographic segmentation include outdoor, recreational, and dietary segments, targeting individuals who follow a particular lifestyle. The central principle to this type of segmentation plays on the assumption that the products and services individual elects to spend on are indicative of their patterns of living. Understanding the customer’s patterns of living helps the business person to fashion their products in a manner that satisfies the lifestyle needs of the targeted market.
Discussion of the Market Segments, Including Descriptors
Geographically, both the country and the region determine the market segment to which I belong, where these factors are linked to the language, lifestyle, and language spoken, for instance. Marketing efforts to a resident of Santa Clara, San Francisco require an astute understanding of the English language, given that the majority of the citizens here are proficient in the language. Appropriate use of language is critical in convincing prospective buyers over the utility of a product or a service to their lives. While the technology industry has elevated San Francisco into one of the highest per-capita earning areas in the US, a majority of the population could be classified as middle income, where the amount of disposable income available to such a family is considerable, while at the same time being constrained. It follows that expenditure for persons within such a market segment has to be guided by need, where the most basic needs for survival are met on a priority basis (Wedel & Kamakura, 2012). From the analysis, therefore, availability of extremely ostentatious products is highly unlikely within the geographic region of Santa Clara. Inclusivity for this market segment is reliant upon residency within the County, which qualifies to the geographic market segment.
Demographics affect market segments through the availability of a large enough group of consumers with similar attributes, with the potential to constitute a differentiable market segment. Santa Clara’s population has been steadily on the rise, almost hitting the two million mark by 2010. The high population indicates a ready market for a wide variety of products, given the diversity in taste between the various residents. Marketers for various products are exploiting the demographic factors relating to my market segment, for instance about products marketed to the generation Y, given their growing potential for disposable income.
Psychographic segmentation relates to market division about class, lifestyle, as well as personality. The types of products and services consumed are indicative of the person’s character, as well as their patterns of living. Social class is a psychographic factor of market differentiation and is determined by the level of income enjoyed by the individual. Of the main classification categories, I fall under the aspirer lifestyle, where the income is limited while at the same time taking care of image, charisma, and appearance.
Application of Maslow’s theory of motivation to each market segment
Maslow’s hierarchy of needs also plays a critical role in shaping the marketing strategies applied for a particular market segment. Geographic segmentation caters for needs ranging from the physiological, represented by the physical dwellings (Moormann & Palvolgyi, 2013). Further, the geographic segment should also have the capacity to fulfill other physiological needs such as food and clothing. Demographics, on the other hand, incorporate needs including, safety and love and belonging, as well as esteem. Given the social nature of human beings, it is incumbent that each has a sense of belonging to social order (Subrahmanyan & Tomas, 2008). Consumption would thus reflect an effort towards earning a place of respect among the other human beings. Psychographic market characteristics occur as transitory, where the disposable income available at present limits the choice in products and services attainable. Psychographic segmentation reveals the aspirer consumption traits, where, spending seeks to protect image/ character while keeping expenses to a minimum.
Understanding of customer market segments is critical in developing appropriate marketing strategies for each identified segment. Prior knowledge of the market dynamics enables the marketing team to fashion their offerings in response to identified needs.
References
Wedel, M., & Kamakura, W. A. (2012). Market segmentation: Conceptual and methodological foundations, (Vol. 8) Springer Science & Business Media
Subrahmanyan, S., & Tomas Gomez-Arias, J. (2008), Integrated approach to understanding consumer behavior at bottom of pyramid, Journal of Consumer Marketing, 25(7), 402-412.
Moormann, J., & Palvolgyi, E. Z. (2013, July), Customer-Centric Business Modeling: Setting a Research Agenda, In Business Informatics (CBI), 2013 IEEE 15th Conference on (pp. 173-179), IEEE
