Geographic Segmentation Base Advantages
- Considers cultural differences of different regions
- Good for firms with limited geographic reach needing to select a specific target market
- Great when there is significant socio-economic diversity and significant consumer behavioral differences across regions
Geographic Segmentation Base Limitations
- Assumes that consumers in a geographic area are similar, which is generally unlikely across a broad area
- Usually needs to be used in conjunction with another segmentation base
Demographic Segmentation Base Advantages
- Simple to apply and use
- Data can be obtained quickly and at low cost
- Census data provides an excellent and rich source of demographic information
- Easy to understand – from management to customer service and sales staff
- Good for in-store profiling of consumers
- Can be used as a surrogate measure for the consumer’s life stage – such as, getting married, having children, retiring, and so on
Demographic Segmentation Base Limitations
- Descriptive only – little understanding of the consumer themselves
- Assumes that consumers in the same demographic group have similar needs and lifestyle – which is unlikely, all 30 year olds are unlikely that have the same needs, for example.
Psychographic Segmentation Base Advantages
- Should provide a much greater insight into the consumers their lifestyles and their needs
- Helpful for uncovering motivations and reasons for product and brand purchases
- Often more helpful for developing promotional campaigns
Psychographic Segmentation Base Limitations
- Requires market research – usually a mix of qualitative and quantitative – which can be expensive
- As a result of the research cost, probably more suitable for larger firms/brands
- Sometimes qualitative market research has a concern regarding the interpretation of the findings
- Psychographic segments may not be as easy to reach via promotional methods or to identify in-store
Benefits Sought Segmentation Base Advantages
- Quite suitable for brands with multiple offerings and targeting a precise market positioning
- Can create an opportunity for niche marketing
- Can aligned multiple products to small market segments, in a congested market
- Helps ensure that the product design and communication hits a known consumer need
Benefits Sought Segmentation Base Limitations
- Can be quite product focused – where products are concentrated on single needs
- The firm may end up with too many products, as a result
- Mainly considers current needs and benefits, rather than trends or future needs
Behavioral Segmentation Base Advantages
- Quite suitable for competitive and mature markets
- Good consideration of factors like loyalty and usage rates
- This segmentation is quite unique to the product category under review
Behavioral Segmentation Base Limitations
- There is no consideration given to why consumers buy
- Relies upon detailed market intelligence – analysis of sales data