What Is a Market Segment? - Definition, Types & Examples

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  • 0:00 Market Segment Definition
  • 0:23 Types Of Market Segments
  • 2:32 Lesson Summary
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Lesson Transcript
Instructor: Shawn Grimsley
Market segmentation is an alternative to mass marketing and is often more effective. In this lesson, you'll learn what a market segment is, types of market segments, and be provided some examples. A short quiz follows.

Market Segment Definition

A market segment is simply a subdivision or part of an overall market with specific and distinctive characteristics. As opposed to mass marketing where you direct your marketing activities to the entire market, in market segmentation, you tailor your marketing to the needs and wants of the particular market segment.

Types of Market Segments

You can divide a market into segments in several ways. Let's take a quick look at each approach.

Demographic segmentation is where a market is divided up based upon demographic differences between consumers, such as age, gender, race, and income. An example of a demographic market segment is white males between the age of 45 and 55 with gross annual incomes between $75,000 and S125,000. The idea is that consumers with certain demographic characteristics will have specific needs and wants and should be targeted differently than groups with different demographic characteristics.

Psychographic segmentation is where you divide the market based upon consumer traits, attitudes, interests, or lifestyles. For example, an organic food company may divide its market into consumers who are primarily interested in the environmental advantages of organic farming, consumers who are primarily interested in the health benefits of organic food, and consumers that seem to just be buying organic food because it's the current thing to do. Different marketing approaches would be used with each of these market segments.

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