Segmentation

It is one of the most fundamental concepts in marketing and your choice of which approach to adopt will directly affect the impact of segmentation on your business.

What is segmentation?

The process of splitting customers, or potential customers, in a market into different groups, or segments, within which customers share a similar level of interest in the same or comparable set of needs satisfied by a distinct marketing proposition.
Marketing proposition; the 'tools' or means available to the organization to improve the match between benefits sought by customers and those offered by the organization so as to obtain a differential advantage. Often referred to as the four Ps, this is usually the appropriate mix of product features, price, promotion and place (service and distribution). For the customer, this manifests itself as benefits, cost, relevant image and convenience; in other words, a customer value proposition.

Marketers use different profilers these can include:

Demographical bases (age, family size, life cycle, occupation)
Geographical bases (states, regions, countries)
Behavior bases (product knowledge, usage, attitudes, responses)
Psychographic bases (lifestyle, values, personality)

There have to be specific criteria in which a company can segment this can include:

•Effective - truly different needs from other segments?
•Identifiable - how can you find those people?
•Profitable - is the segment big enough to offer real profits?
•Accessible - can you reach this group easily?
•Actionable - can it be done?

So many types of product have a range of segmentation for example SHAMPOO!
All it is really needed for is to wash hair so there could be one type for everyone which there always was. However more recently there are different shampoos for all kinda of different purposes. These include:
Coloured Hair-Blonde, Red or Brunette
Dry or damaged hair
Dandruff
Greasy hair.
There are many more from a range of different brands, however if we only need one why do we spend ages looking through all types of shampoos?
Because of society we feel we need those types of shampoo that are suited to our hair type, when really if you look on the label they most probably have the same ingredients with a few extras so your 50p Tesco value shampoo will do the same job to some extent as the £6 Aveda bottle.
This is mainly down to our perception of different products, we feel we need those that suit our hair and the quality that is shown through the brand or price not necessarily what it will do. Does shampoo for shiny hair really make it more shiny?