The simple idea of dividing marketing into these segments helped the company develop better strategies
The Demographic Strategy
Demographic segmentation involves dividing the customer market using variables such as gender, age, income, level of education, occupation, socioeconomic status, type of family (traditional, divorced, single parent), religion, language, culture and nationality. For example, a product may succeed in one area of the country and fail in another due to the concentration of a particular culture or nationality. Toys and clothes are usually marketed to particular ages and genders, and some services are created specifically for those in a particular income bracket (e.g. housekeepers, nannies, landscapers). If your target market is families with young children, a demographic marketing strategy would have you searching for advertising opportunities in magazines, online newsletters, websites and other publications that cater to these families.
The Geographical Strategy
Geographical segmentation divides the market according to specific location, and can refer to an overall country or state or can be divided further by neighborhood. Geographical segmentation can also use variables like climate, size of city or town, rural or metropolitan area, and type of landscape (mountainous, beachside or farmland). This allows companies to determine the kinds of products that are useful or necessary in specific areas. For example, a company specializing in surfboards and other beach sports equipment will focus its efforts on states such as Florida and California where surfing is a popular sport. This strategy allows for targeted communication as well. If the company is using billboards in a beach area, the message is more likely to reach its intended target than placing the same billboard ad in the middle of a city.
The Psychographic Strategy
The psychographic strategy divides the customer market according to values and lifestyles, social status and personality type. This type of segmentation separates the market by how a person living a certain lifestyle responds to the consideration and purchase of a product or service. Interests, attitudes, opinions and values all contribute to a person’s view toward a product or service. For example, those with liberal political views may not be interested in a new book authored by a very conservative author. Using this strategy, a company can present its products in a way that makes them attractive to a particular group, according to their status, personality or values. Higher social classes may be more open to additional services, features and exclusive sales, as an example.
The Behavioral Strategy
The behavioral segmentation strategy means that the company uses information obtained regarding its customers’ needs and their reaction to the needs. Behaviors may include customer loyalty to a particular brand; paying the asking price for purchases or living on a restricted budget; repeat purchases or first-time customer; or customers who are ready to purchase or ready to compare to what they have seen elsewhere. Customers segmented using this strategy may also be divided according to the way they use the product or service or the intensity with which they use it — for example, a customer who hires a cleaning service once a week versus one who hires the same service once every six months. If a company realizes that there is a need for additional choices from a line of products in order to provide more variety to a loyal customer, it can develop the products based on the knowledge received via this segmentation strategy.