What Is Market Segmentation?
Market Segment: a subdivision of a market with distinctive characteristics, bigger than a niche
Variations in the characteristics of products are frequently so markd that it makes sense to subdivide a market into segments.
From a new firms perspecive, it can make sense to target a small segment or niche, which is relatively neglected.
Segments of a Market
The main consumer market segmentation characteristics are:
- Age (often by age groups)
- Gender and sexual orientation
- Location (where people live)
- Social Class (linked mainly to occupation)
- Behavior (spending patterns, brand loyalties, buying habits)
- Psychological (lifestyle, attitudes, personality, values)
Niche Market: a small section of a market with distinctive specialised requirements
A niche market has a USP because there are not many competitors that provide the same good/service that that business does. Because of this, a business can usually charge a high price for the good/service as people will still be willing to pay that amount as that is one of the only places they can buy what they are looking for.