levels of market segmentation

The 5 Levels of Market Segmentation (Explained)

The Levels of Market Segmentation

Complying with the market segmentation, a marketer can sub-group a large market to make his marketing efforts more approachable and impactful. There are different levels of market segmentation, each of them holds certain uniqueness that a marketer needs to be serious about while producing, promoting, or distributing products/services to target customers.

The primary levels of market segmentation are:

  • Mass marketing
  • Segment marketing
  • Niche marketing
  • Local marketing
  • Individual markeng

Mass Marketing

Mass marketing is the marketing of one single product through one strategy to the entire market. Mass marketing believes that in the market there are most people having similar kinds of characteristics, behavior, consumption pattern. It does not differentiate the whole market on the basis of any factors such as consumer’s taste, need, preference, age, sex, etc. thus, it is also called undifferentiated marketing.

Mass marketing involves the mass level of activities such as mass production, distribution, promotion of one product to all the potential buyers. The firm which adopts the mass marketing level of market segmentation, if the firm operates at the national level – will target all potential buyers of the country. And, if the firm operates at an international level – it may target all the countries of the planet by considering its capacities.

Mass marketing helps firms to get economies of scale, get larger markets, more sales, and more profit but it also creates a high level of competition.

Segment Marketing

Another one of the important levels of market segmentation is segment marketing. As its name suggests, segment marketing divides the whole market into its various segments on the basis of some factors such as customers’ consumption pattern, purchasing power & spending pattern, geography, social values, etc. As segment marketing differentiates the entire market into many segments, it is also known as differentiated marketing.

The best and foremost attractive benefit of segment marketing is, it enables marketers to understand the actual problems of each segment and responds in the best possible way. The big companies having different types of products usually focus on doing segment marketing. For example, a car company differentiates its care as low-cost cars, luxurious driving experience, performance-based, etc.

By reaching each of the markets, the firm can make more sales, satisfies each of the targeted segments, and of course increase the profit amount. However, for each market segment, the firm needs to adopt a separate marketing strategy which may be difficult to do by all firms.

Niche Marketing

Niche marketing is the highly specialized level of market segmentation, where the marketer only focuses on specific customers, their distinct need, want, and characteristics. The firm concentrates only on a specific market segment, thus it is also called concentrated marketing.

Example of niche marketing may be a sports car company, where the company only focus on the need and requirements of sports personalities. It does not concentrate on others aspects such as family need, price, etc. Similarly, in the site you are reading, its niche is education/reference.

A niche is a closely defined group that seeks a distinctive mix of benefits. In niche marketing, the marketer caters to a very specific market segment that requires high-quality service and attention. In this case, customers may have specific types of needs, they may require some special types of services, and they become ready to pay a premium price for the product. So the marketer needs to develop specialized knowledge and better services.

Local Marketing

The local marketing level of market segmentation may the easiest to understand than other levels. It simply is the marketing in local markets or areas. Where the locally produced products are marketed in the same area. For example, a farmer market and sells his vegetables to his neighborhoods, his communities people, and other persons of his village.

The marketer may target his neighborhoods, local consumer group, his village people & nearby villages, local market, small region, or even specific stores. The product features may consist of local appeals, organic, local flavor, local usage, etc.

The market size in local marketing is very small. The production and distribution cost may be high to the local marketer due to low production, however, there is very low competition and there is a restriction for the competitors to entering in such local market.

Indiviaul Marketing

Individual marketing is also very easy to understand like local marketing. In individual marketing, the marketer focuses on the satisfying the need and want of a single customer. It is a micro marketing strategy, also referred to as one-to-one marketing and customized marketing. Where a targeted customer is offered a customized or service.

It is like direct marketing, where the marketer individually visits, communicates, and offers his services to the target customer, or also by personalized messages. Mostly, this marketing is used in B2B marketing where more attention is given to market products.

To market an individual person, the marketer may focus on the customer’s profile, sentiments, buying behavior, personal need, want a hobby, location, etc. The marketer may be involved in individual marketing because the targeted customer is rich and has more spending habits.

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