Market Segmentation Is Often Defined as \"Grouping

Market segmentation is often defined as "grouping people according to their similarity related to a particular product category" (Richardson). The most commonly used forms of segmentation are geographic, demographic, psychographic and benefit; demographic and geographic segmentation are descriptive while psychographic and benefit segmentation are behavioral. In order to determine the appropriate market for a particular product, you must be first be able to identity what sort of product you will be marketing, whether it is a consumer good or service or an industrial good or service. In this particular case, a new beverage will most likely be classified as a consumer good and as a convenience good. Maslow's hierarchy of needs categorizes all of our desires based on necessity for survival. For example, food, water and shelter are at the highest level of Maslow's hierarchy of needs because human beings absolutely cannot survive without them. On the other hand, items such as iPods, TVs, cell phones, candy, brand name clothing, etc. are at the bottom of the list because they do not enable our everyday survival; instead, they are merely objects which add to our level of pleasure.

Different products and services may need to be segmented based on differing criteria or even more than one market in which case there will be a marketing mix. With a new beverage, the segmentation and potential markets would be based on demographics and psychological variables and lifestyles. The age and gender of the market will play a crucial role followed by the lifestyle, personality and self-image of the target customer's. Once all of these variables have been identified an appropriate advertising plan can then be implemented. In the case of a new beverage, the both children and parents alike will have to be targeted. The beverage will have to appeal to the children based on lifestyle and self-image; however, other attributes such as health benefits may have to be added into the marketing strategy in order to appeal to the parents as well. Initially, the children will most likely be the ones drawn to the new beverage but ultimately, the parents have the purchasing power and will make the final decision. In that case, the marketing must appeal to both target markets. Further demographic data analysis should be conducted in order to determine the average household size along with the family life cycle stages. Typically, there are three family life cycle stages -- young single; young married with no children; and young and either married with children, divorced without children or divorced with children. With a new beverage, the key target market would be young and either married with children or divorced with children. With both instances, the target customers' lifestyle is most likely quit busy and convenience is almost always seen as a benefit. Both married and single parents are constantly seeking ways to add more convenience to their everyday lives within a reasonable cost. Therefore, if the beverage is also offered in convenient packaging or sold at convenient locations they may be more inclined to purchase the product.