Many market segmentation experts define market segmentation as the process by which you separate a target market from the mass market. Thus, when they refer to a segment, they refer to what I call a target market.

Market Segmentation – My Definition

I use slightly different terminology. Instead of referring to a specific market within the mass market as a segment, I refer to that market as a target market. Likewise, instead of using “segment” to refer to a target market, I use it to refer to a demographic variable, from which psychographic and behavioral characteristics can be determined.

Criteria For a Target Market

As a result, I consider several demographic variables as criteria necessary to determine a target market. These include age, occupation, education level, gender and race or national origin.

You may notice my different use of terms when reading the report on my matrix market segmentation process.

Simplifying Market Segmentation

This process simplifies market segmentation. It starts with demographics because most business owners know at least some demographic characteristics of their target markets. It then uses a systematic process to determine psychographic and behavioral characteristics based on the demographics.

By considering all the characteristics across different demographic segments, you can determine four to five shared characteristics that will effectively communicate with and relate to target market members.

In addition to defining segments and necessary criteria differently, my matrix market segmentation process also differs from many other market segmentation processes because of what it doesn’t require. It enables you to gather significant information about a target market without the technical skills, computer software or statistics required by most market segmentation processes.

You can get more information on market segments at the following link: Criteria Necessary For A Market Segment: Measurable and Identifiable

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Posted 5-22-08: Market Segmentation:
Defining Market Segments

Market segmentation by life stages can help you learn about your target market.

People, like butterflies, go through life stages and look psychologically different at each stage.

When you know your target market’s age range, you can use market segmentation to learn about what your target market members consider important.

Every adult needs to accomplish similar tasks as they move through different age ranges or life stages. So knowing the age range of your target market, enables you to discover tasks that your target market members consider important. This information will help you to better design marketing appeals for them.

All people move through different stages in their adult lives. People in each life stage share characteristics and tasks with other people in that life stage. These shared characteristics remain somewhat common in spite of the generation presently in the life stage.

Market Segmentation By Life Stage Reveals Career Tasks

For example, the list below provides some of the most important tasks by life stages.

• Provisional Adulthood – Choosing a career and entering the workforce.
• Early Adulthood – Progressing in careers and settling into work.
• Middlescense – Reexamining work.
• Age of Mastery – Adjusting to realities of work and approaching retirement.
• Age of Integrity - Disengaging from paid work and searching for new achievement outlets.

Market Segmentation By Life Stage Improves Marketing

Knowing the life stage of your target market members, tells you the most important tasks and responsibilities that concern them. This information helps you to create marketing tactics and messages that speak and relate to what they are experiencing.

For instance, all teenagers and young adults in the provisional adulthood stage (18-29), strive for independence, value their friends more than their families, and are sometimes rebellious.

You can use similar life stage tasks to better understand and market to your target market. It’s easy with market segmentation.

You can also read about Lifestyle As A Basis for Market Segmentation.

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Posted 3-12-08: Market Segmentation by Life Stage Market Segments

Market segmentation by generations enables you to determine characteristics of your target market.

It reveals differences between generations to help you discover the best appeals to use in your marketing. For example, World War II women, represented by the picture below, differ from all other generations of adult women in the USA today. So you have to market to them differently than to women in the Baby Boomer, X and Y generations.

Market Segmentation By Generations Reveals Four Adult Generations

Generation research has determined that four types of generations cycle though USA history. These types and the present adult generations that they represent are, from the oldest adults to the youngest:

1. The adaptive generation, represented by today’s WWII Generation, become active problem solvers in order to adapt to major historical and economic changes.

2. The inner fixated idealist, represented by today’s Baby Boomers, are indulged kids, me-oriented youth, and mid life moralizers.

3. The reactive generation, represented by today’s Generation Xers, include under-protected youths, alienated risk takers who burnout young, mellow into pragmatists and become conservative at middle age, and caustic as elders.

4. The civic generation, represented by today’s Generation Y, are protected by adults and become strong-willed, moral, serious, and optimistic with age.

Market Segmentation By Generations Is Based On Historical Influences

In addition to the four types of generations, generation research holds that the historical events of people’s lives have a profound influence on the type of people they become. Therefore, people in different generations are different because they have experienced different events at different ages.

Events can be historically or culturally significant:

• Historical events change history, but the exact time of the event may be difficult to pinpoint. For example the great depression was a historical event for the WWII generation.
• Cultural events affect us psychologically for a while, but don’t necessarily change the way we live. For instance the Hindenberg represents a cultrual event for the WWII generation.

When the two combine, they comprise a defining moment. Defining moments have the most profound influence on a generation, and the more impressive the age of people in the generation when the event occurs, the more profound its influence.

Following is a brief description of adult generations in the USA today.

Market Segmentation For The WWII Generation

The oldest generation is called the World War II Generation or WWII Generation for short. This generation represents today’s retirees.

You can best market to this generation by understanding how it differs from other generations and how the older and younger members of this generation differ from one another.

• Those born from 1901 to 1924 are active, confident problem solvers, intelligent and have a sense of optimism.
• Those born from 1925 to 1942 want to stay young and are attracted to adventure.

Both groups become less materialistic as they age, but still comprise important target markets, especially for those in the health care and home improvement industries.

Market Segmentation For Baby Boomers

The next oldest adult generation is called Baby Boomers. Boomers are nearing retirement age, but aren’t expected to retire in the traditional sense.

Market segmentation research reveals that Baby Boomers believe they are important. To market to them successfully, you must recognize their need to feel important, and their drive and individualism.

Baby Boomers are smart consumers. Because of the Baby Boomer generation’s size, businesses have long catered to its members with customized and personalized products and with niche marketing.

So if you want to market to Baby Boomers, you need to market to niches of them with personalized products and excellent service. You also need to use market segmentation to determine characteristics that differ between older and younger Baby Boomers.

Market Segmentation For Generation X

The present reactive generation is called Generation X.

Market segmentation research reveals that Generation X members distrust their elders, especially Baby Boomers. They also don’t respect people just because of their positions.

If you want to do business with Generation X members, you have to earn their trust and keep it. You can reach them best by word-of-mouth because they don’t trust traditional media.

If you reach them, earn and keep their trust and provide the products they need, you will find Generation X members to be materialistic and rabid consumers.

Generation X members start their own businesses at three times the rate of Baby Boomers.
So they comprise an especially important to business-to-business market.

Market segmentation provides additional characteristics to aid you in marketing to this elusive generation.

Market Segmentation For Generation Y

The youngest adult generation today is called Generation Y.

Marketing to Generation Y isn’t easy because its members have few shared experiences, and their tastes constantly change. Plus, their media preferences differ from all other generations.

Still market segmentation reveals many characteristics that will help you market to Generation Y effectively.

And because of the large size of Generation Y, and how much its members spend, it’s a profitable market. Generation Y members spend $95 billion annually.

Market Segmentation For Generations Conclusion

Present generations differ from one another because each generation experienced different historical events, were raised differently and were given different social missions.

This requires a different type of marketing for each generation. So if you want to market your products and services successfully, you must know the generation of your target market and its distinguishing characteristics.

You can also read distinguishing characteristics by life stages.

You can discover more about how and why generations differ with individual reports on each generation.

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Posted 3-11-08: Market Segmentation by Generations

Market segmentation provides a wealth of information about people from their age because age reveals your target market’s

• generations and

• life stages.

Market Segmentation Reveals Generation Characteristics

Generation research holds that historic events during a person’s life have a profound influence on their psychographic and behavioral characteristics. Because a person’s generation is determined by birth date, age is an important market segmentation criteria.

Market Segmentation Reveals Life Stage Characteristics

The second reason that age is an important market segmentation criteria is because it reveals a person’s life stage. Life stages reflect changes that people make as they age, regardless of historical influences.

All adult stages are about psychological and social growth propelled by what Gail Sheehy calls “an underlying impulse toward change.”

I provide more information about generations and life stages in the following posts.

Market Segmentation by Generations

Market Segmentation by Life Stage

Market Segmentation by Age Conclusion

In conclusion, when you know the age of your target market, generation and life stage characteristics help you to better understand target market members. So age provides an important criteria for market segmentation.

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Posted 3-10-08: Market Segmentation
by Age Market Segment