Marketers can differentiate market segments along demographic, psychographic and behavioral lines

What is the market segmentation process? Describe these three ways of identifying audiences and explain how they contribute to the understanding of audiences.

Target marketing involves understanding the needs of specific groups of consumers or segments and appealing to them through positioning of a firm's various brands. Segmenting involves the elaboration of marketing strategies for these products, targeted at specific groups of people. There are compelling reasons for segmenting, including that diverse audiences have diverse needs, the increasing use of segmenting for all types of promotional efforts (MPR being one example), and the growing sophistication of marketers' use of segmentation. Overall, the use of segmentation allows marketers to tailor precise strategies to specific target markets.

Once a marketer has identified prospective audiences, these potential customers are segmented based on whether they share similar needs or demonstrate similar behaviors. The reason for such segmentation is to group audiences in ways that will help marketers to anticipate how specific customer groups will relate to a firm's brands and subsequently respond to marketing activities directed at those particular groups.

Marketers employ a number of bases for segmentation. The three most widely used criteria are demographic, psychographic and behavioral. Demographic segmentation represents fundamental population descriptors that divide markets into such variables as sex, age, family size, educational level, income, and ethnicity, among many others. Psychographic segmentation divides markets according to the personal preferences and lifestyles of consumers. Behavioral segmentation divides consumers according to their usage of products and media. Typically, all three segmenting dimensions are combined to yield rather complete audience profiles.