How often would you have heard this dialogue in movies - “Duniya me do tarah ke log hote hain, achche or bure” (Translation: There are two kinds of people in the world, good and bad). Let me tell you, that is a classic example of what we marketers call ‘Segmentation’.
You have understood that Segmentation, Targeting and Positioning (i.e. STP) is the first step of in the process of Marketing. Now, while I gave you a high-level idea of segmentation in the last chapter, you could still be wondering that what is Segmentation all about?
In this chapter, lets take a close look at what is Segmentation in Marketing and why you as a marketer need to be really good at it.
What is Segmentation?
Segmentation is that first step wherein you take this potential audience and group the different people into different groups based on some criteria like their needs, wants, behavior and demographics etc.
Segmentation is that first step wherein you take this potential audience and group the different people into different groups based on some criteria like their needs, wants, behavior and demographics etc.
For example, if I am running this platform Super Heuristics, I need to make a conscious choice that whom do I want to serve and communicate to.
- Whether I want to talk to School students or College students & passouts about their careers?
I choose College Students and Passouts. - Whether I want to serve Undergraduate or Postgraduate students?
I choose Postgraduate students. - Whether I want to serve MBA or M.Tech or MS. or PhD. students?
I choose MBA students. - Whether I want to serve MBA students or India or Abroad?
I choose India
Now this list or segmentation process can go on. I can categorize the entire universe basis different qualifiers.
The definition of a Segment as per Prof. Philip Kotler is - "A market segment consists of a group of customers who share a similar set of needs and wants"
Keep one thing in mind over here. In this process of Segmentation you are not yet choosing which segment would you want to target. That is for the next step of Targeting.
Segmentation - Mutual Exclusive and Exhaustive Groups
Here, in Segmentation, your only objective is to split the entire universe of people into mutually exclusive and exhaustive group. In effect, it is about developing the lens through which you want to see the world.
At the start of the chapter, I gave a desi example from Indian movies. Let’s quickly dissect that example further:
“Duniya me do tarah ke log hote hain, achche or bure”
(Translation: There are two kinds of people in the world, good and bad)
Which means that the way in which I should split my audience should be such that all the categories I create should together include all the people in it but no two groups should ideally have the same people.
Take for example the narration I gave you above for my segmentation for my blog Super Heuristics.
Where I mentioned that I had to chose "Whether I want to talk to School students or College students & passouts about their careers?", notice that it entirely covers the entire universe of humans out there.
That's because any person in the world can be categorized either as a School student, a College Student or a Passout from the college.
Sure, more people would be there in the Passout group because that is virtually everyone except for the school and college students.
But, that is the idea.
Now in the second step, when I had already chose College students, all the college students became my universe. Now in that universe, my segments became Undergraduate Students or Post Graduate students.
Again, if you observe, not only do both these groups cover the entire universe of college students but a student who is an undergraduate student cannot be a postgraduate student and vice-versa.
So then, what is Segmentation?
I believe one thing that would have been clear to you by now is that Segmentation is more like a lens through which you want to look the entire universe of people out there. It allows you to slice and dice your audience in different ways based on different criteria.
Again, a good definition of a segment is given by Prof. Philip Kotler. He says "A market segment consists of a group of customers who share a similar set of needs and wants".
Let's get to the next chapter where in I will take you through the different methods of segmentation.