What are the levels of market segmentation?

Market Segmentations used to divide a market into small groups with similar needs or behaviour who might require different products or marketing mixes. As a marketer, we understand that we can’t be all things to all people, all of the time. Buyers and markets are complex and diverse for one simple marketing formula to adequately address the needs of all. Market segmentation is used by the marketers to divide the market into smaller segments that can be efficiently addressed.

There are four levels of market segmentation:

  1. Mass Marketing
  2. Segment Marketing
  3. Niche Marketing
  4. Micro Marketing

Four levels of market segmentation

Mass Marketing (same product to all consumers) in mass marketing we assume that target market is made of similar kind of consumers and we use the same product, promotion, and distribution to all consumers. e.g. coca cola at a time. Mass production, distribution in the bulk-and global advertisement are the advantage of mass marketing.

Segment Marketing (different products to one & more segments) in segment marketing we make an offering so they more closely match the needs of one or more segments. We also refer it to selective marketing or differentiated marketing, Executive class and economy class of ticketing in the airlines’ industry, Room segmentation in hotel business are the example of segment marketing. These products are carefully designed to meet the needs of each segment served.

Niche Marketing (different products to subgroups within segments) in Niche marketing a company makes its offering to match the needs of one or more micro-segments more closely where there is no, or petition or little competition. We can name it as concentrated marketing, firms concentrate their selling to a small market segment or niche. Fortuner SUV is a classic example of niche marketing.

Advantages of niche marketing:

  • High level of specialization helps in a reduction of cost
  • Help to occupy a dominant market position within the chosen niche
  • Creates a strong brand image
  • No competition or little competition

Micro Marketing (products to suit the tastes of individuals or locations) is marketing programs tailored to narrowly defined geographic, demographics psychographics behavioral segments. Micro Marketing is further classified into THREE categories

  • Local Marketing
  • Individual Marketing
  • Mass Customization

Local Marketing: Products and promotions to meet the needs and wants of the local customer group.

Individual Marketing: Products and marketing programs to meet the needs of the individual customer.

Mass Customization: Preparing individually designed product and communication on large scale.