{"id":739,"date":"2019-09-24T11:56:17","date_gmt":"2019-09-24T06:26:17","guid":{"rendered":"https:\/\/www.hestabit.com\/blog\/?p=739"},"modified":"2021-10-14T13:21:43","modified_gmt":"2021-10-14T07:51:43","slug":"customer-segmentation-types","status":"publish","type":"post","link":"https:\/\/www.hestabit.com\/blog\/customer-segmentation-types\/","title":{"rendered":"How Can Startups Choose Their Customers?"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">To market a product, you need to convey the right message to the right people. To make that happen, there is a need to learn about customer segmentation.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A good segmentation streamlines both marketing and production efforts. You can select optimum communication channels for a segment. Moreover, you can test your pricing options and <\/span><span style=\"font-weight: 400;\">focus on profitable customers.<\/span><\/p>\n<p><strong>Customer Segmentation can help a startup on a lot of fronts, na<\/strong><strong>mely: <\/strong><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Competitiveness<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Expansion Ability<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Customer Retention<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Timely Capitalization<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Price Optimization<\/span><\/li>\n<\/ul>\n<h2>Generally, there are 4 types of Market Segmentation. Let\u2019s throw some light on them:<\/h2>\n<h3>1) Demographic segmentation<\/h3>\n<p><span style=\"font-weight: 400;\">It&#8217;s a very basic segmentation and is derived from the word \u2018Demography\u2019. The prospective market is identifies based on consumers\u2019 age, gender, and ethnicity. <\/span><\/p>\n<p><strong>Demographic Segmentation also includes: <\/strong><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Family Size<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Family Life Cycle <\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Income<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Education <\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Occupation<\/span><\/li>\n<\/ul>\n<p>Also, you can determine your target group and streamline your <a href=\"https:\/\/www.hestabit.com\/blog\/importance-of-long-form-content-in-marketing\/\">marketing<\/a> strategies.<\/p>\n<p><span style=\"font-weight: 400;\">For example, if your brands deal in sports cars, you would target people in the age group of 20-35. Also, you can consider the data on income, as income reflects the choices of consumers.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><strong>What if you own a women&#8217;s magazine?<\/strong> <\/span><\/p>\n<p><span style=\"font-weight: 400;\">You will obviously target females of a particular age group based on the content of your magazine. You may also consider the family size or the total number of females in a family. More the number of females, more likely they will discuss things related to femininity. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">A prominent advantage of this segmentation strategy is that the variables considered are easily measurable.<\/span><\/p>\n<h3><b>2) Behavioral Segmentation <\/b><\/h3>\n<p><span style=\"font-weight: 400;\">As the name suggests, this segmentation is based on the behavioral analysis of customers, when they make decisions to purchase a product or service. Understanding the readiness of customers to purchase a product, their loyalty towards a brand, their, and spending habits, is a part of Behavioral segmentation.<\/span><\/p>\n<p><strong>What are the goals behind segmenting customers based on their behavior? <\/strong><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Determining how a product or a service can meet the needs of different customer segments<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Tailoring your marketing initiatives and campaigns to reach a specific segment at a time in which they\u2019re most likely to make a purchase<\/span><\/li>\n<\/ul>\n<h4>Behavioral Segmentation can be further branched into:<\/h4>\n<h4><b>a) Purchasing \u00a0Behaviour<\/b><\/h4>\n<p><span style=\"font-weight: 400;\">A consumer\u2019s purchasing behavior can be broken down into four possible categories:<\/span><\/p>\n<p><strong>(i) Complex Purchasing Behaviour<\/strong><span style=\"font-weight: 400;\"><strong>:<\/strong> At times, customers are way too involved in the decision-making process, as the brand of the product plays a key role in the purchase. For example, a customer might get stuck between Mercedes and BMW, which makes his or her behavior towards s purchase rather complex. \u00a0<\/span><\/p>\n<p><strong>(ii) Habitual Purchasing Behaviour:<\/strong> <span style=\"font-weight: 400;\">At times, customers aren\u2019t much involved with the purchasing process, as the quality of the product doesn\u2019t vary from brand to brand. So it all comes down to a customer\u2019s preference. For example, there is hardly any difference between Coke and Pepsi, and it\u2019s more or less about a customer\u2019s habit. What he has been drinking habitually or even lately. <\/span><\/p>\n<h4><b>b) Occasion or Timing<\/b><\/h4>\n<p><span style=\"font-weight: 400;\">The desire of customers to make a purchase is heavily dependent on occasions or timing of the year.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Consumers are more driven to make a purchase during a festive or a holiday season than they are the rest of the year. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">People even create their own occasions, which they celebrate yearly, monthly, or even weekly. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">For example, people might order flowers from the same brand to celebrate their anniversaries. <\/span><\/p>\n<h4><b>c) Benefits Sought<\/b><\/h4>\n<p><span style=\"font-weight: 400;\">If anyone asks their customer <strong>\u201cWhy do you use our product\/service?\u201d,<\/strong> you are likely to get exclusive answers. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">For example, just think about customers who are visiting a local grocery store:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Some will look for the best deals available<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Few of them will be highly health-conscious, and won\u2019t worry about the best deals and will only look for the freshest of eatables. <\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Some will be in a hurry to get their hands on some essentials so that they can go home and enjoy their weekend. <\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">So different traits and scenarios should be taken into consideration when segmenting consumers. <\/span><\/p>\n<h4><b>d) Loyalty <\/b><\/h4>\n<p><span style=\"font-weight: 400;\">A loyal customer is different than a habitual customer. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">The buying patterns of a habitual customer are <strong>need-oriented<\/strong>, no matter what brand is fulfilling that need. On the other hand, the buying patterns of a loyal customer are\u00a0<strong>brand-oriented<\/strong> and are beyond lucrative deals. For example, there is a hardcore loyalist of Blackberry, who won\u2019t ever shift to iPhone. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">But you still shouldn\u2019t take a back seat and take your loyal customers for granted. You need to understand their psyche, zero in on features which drive them towards your product and improvise. \u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It\u2019s important to thank them for their patronage so that they can engage with your product further. \u00a0<\/span><\/p>\n<h3><b>3) Psychographic Segmentation<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">When you divide the market based on consumer\u2019s personality traits, values, attitudes, and interests, then it comes under Psychographic Segmentation. \u00a0The gap between a product and a customer\u2019s requirements narrows to a great extent by this segmentation. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Understanding consumer\u2019s past regarding their buying patterns is the crux of this segmentation. <\/span><\/p>\n<p><strong>You need to gather data pertaining to their: <\/strong><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Personality<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Lifestyles<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Social Class<\/span><\/li>\n<\/ul>\n<p>Don&#8217;t confuse Psychographic segmentation with Behavioral segmentation.<\/p>\n<p><span style=\"font-weight: 400;\">The former is done to see how well your product or service blends with your customer\u2019s lifestyle. The latter<\/span><span style=\"font-weight: 400;\">\u00a0is done to understand the psyche of customers. To understand why customers push the \u2018Buying Button\u2019, <\/span><\/p>\n<p><strong>By following the right methods and gathering relevant data, you can gain knowledge on:<\/strong><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">What consumers value in life<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Consumer\u2019s pain points<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Apprehensions that consumers have to avail your kind of product or service <\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Ways in which you can help consumers extract value out of a product or service, based on their attitudes.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">It\u2019s not just about obtaining this knowledge. You should modify your products or services in accordance to give customers an exclusive and personalized experience so that they can associate better with each of your offerings.\u00a0This is how you can build long-lasting relationships.\u00a0<\/span><span style=\"font-weight: 400;\">You must read how <a href=\"https:\/\/www.hestabit.com\/blog\/audience-personalization-how-netflix-does-it\/\">Netflix has taken personalization<\/a> to the next level.<\/span><\/p>\n<h3><b>4) Geographic Segmentation <\/b><\/h3>\n<p><span style=\"font-weight: 400;\">One can segment a market on the basis of geography as well.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">You can segment a market locally (city or state-wise), or continentally, or even internationally. Moreover, you can further divide a selected state or a city into rural, suburban, and urban regions. You can also segment based on the population or climate. <\/span><\/p>\n<p><strong>How do Geographic Segmentation benefits?<\/strong><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">There are organizations whose products or services cater to national or even international markets. For that, understanding the cultural and historical characteristics of a region becomes crucial. This is where geographic segmentation comes in handy. \u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">This kind of segmentation saves a lot of moolah for small businesses have limited budgets. It prevents them from deviating to regions not conducive for their business practices. <\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">For a densely populated region, this segmentation is useful. Such a region will have rural, urban, and suburban population. The rurality and the urbanity of a region alter the buying habits of consumers. Moreover, segmenting a region likewise helps to figure out the needs of consumers living in such diverse environments. <\/span><\/li>\n<\/ul>\n<p>Hope you liked this write-up. The next step in a startup journey is <a href=\"https:\/\/www.hestabit.com\/blog\/how-to-do-competitor-analysis-for-startups\/\">competitive analysis<\/a>. Do give it a read as well.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>To market a product, you need to convey the right message to the right people. To make that happen, there is a need to learn about customer segmentation.\u00a0 A good segmentation streamlines both marketing and production efforts. You can select optimum communication channels for a segment. Moreover, you can test your pricing options and focus on profitable customers. Customer Segmentation can help a startup on a lot of fronts, namely: Competitiveness Expansion Ability Customer Retention Timely Capitalization Price Optimization Generally, there are 4 types of Market Segmentation. Let\u2019s throw some light on them: 1) Demographic segmentation It&#8217;s a very basic segmentation and is derived from the word \u2018Demography\u2019. The prospective market is identifies based on consumers\u2019 age, gender, and ethnicity. Demographic Segmentation also includes: Family Size Family Life Cycle Income Education Occupation Also, you can determine your target group and streamline your marketing strategies. For example, if your brands deal in sports cars, you would target people in the age group of 20-35. Also, you can consider the data on income, as income reflects the choices of consumers.\u00a0 What if you own a women&#8217;s magazine? You will obviously target females of a particular age group based on the content of<a href=\"https:\/\/www.hestabit.com\/blog\/customer-segmentation-types\/\" class=\"more_link more_link_dots\"> &hellip; <\/a><\/p>\n","protected":false},"author":3,"featured_media":1574,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"image","meta":{"footnotes":""},"categories":[403,47],"tags":[457,405],"yst_prominent_words":[272,338,341,293,413,1715,167,347,348,339,416,343,172,335,345,340,346,342,456,336],"class_list":["post-739","post","type-post","status-publish","format-image","has-post-thumbnail","hentry","category-market-analysis","category-startup","tag-customer-segmentation","tag-market-analysis","post_format-post-format-image"],"_links":{"self":[{"href":"https:\/\/www.hestabit.com\/blog\/wp-json\/wp\/v2\/posts\/739"}],"collection":[{"href":"https:\/\/www.hestabit.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.hestabit.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.hestabit.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.hestabit.com\/blog\/wp-json\/wp\/v2\/comments?post=739"}],"version-history":[{"count":15,"href":"https:\/\/www.hestabit.com\/blog\/wp-json\/wp\/v2\/posts\/739\/revisions"}],"predecessor-version":[{"id":2647,"href":"https:\/\/www.hestabit.com\/blog\/wp-json\/wp\/v2\/posts\/739\/revisions\/2647"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.hestabit.com\/blog\/wp-json\/wp\/v2\/media\/1574"}],"wp:attachment":[{"href":"https:\/\/www.hestabit.com\/blog\/wp-json\/wp\/v2\/media?parent=739"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.hestabit.com\/blog\/wp-json\/wp\/v2\/categories?post=739"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.hestabit.com\/blog\/wp-json\/wp\/v2\/tags?post=739"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.hestabit.com\/blog\/wp-json\/wp\/v2\/yst_prominent_words?post=739"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}