Instead of trying to sell to “everyone”, businesses focus on groups where the message, product, and price can be matched to what that group wants.

The syllabus focuses on three major ways a market can be segmented. A strong answer includes both what it is and examples.

1) Demographic

Demographic segmentation is based on who the customer is. These are usually the easiest characteristics to measure.

• Age: teens (student discounts) vs adults (premium services)
• Gender: products and promotion can be adjusted depending on who the business is speaking to (e.g., women’s vs men’s activewear campaigns).
• Income: budget buyers vs premium buyers
• Education: marketing can differ for high school students, TAFE students, and uni students because their needs, schedules and budget are different.
• Occupation: FIFO workers vs office workers
• Life stage: single vs families with young kids
• Family size: bigger families value bundle deals

Examples

• A tutoring business targets Year 11–12 students and parents (age + life stage).
• A dentist promotes Invisalign more to working adults with higher disposable income (income + age).
• A gym targets FIFO workers with flexible membership pauses (occupation).
• A café runs a “kids eat free” deal to attract families during early dinner times (life stage).

These Nike ads show demographic segmentation by targeting different customer groups through the use of gender-specific athletes and imagery.

2) Geographic

Geographic segmentation is based on where the customer lives, works, or travels from.

• Suburb / local area: Scarborough, Trigg, Fremantle, Joondalup, Victoria Park, Midland
• International markets: Targeting overseas customers such as New Zealand, South-East Asia, Europe, or the UK from a Perth base
• Urban vs regional: Perth metropolitan area vs Bunbury, Kalgoorlie, Albany
• Tourist locations: areas with high visitor numbers such as Rottnest Island, Fremantle, and Elizabeth Quay

Examples

• A café near Scarborough Beach targets local beachgoers and tourists during summer due to higher seasonal demand.
• A takeaway business in Joondalup targets local schools and office workers for weekday lunchtime trade.
• A regional mechanic in Bunbury targets local residents and commuters, rather than customers from the Perth metropolitan area.
• A souvenir store at Elizabeth Quay targets domestic and international tourists visiting Perth’s waterfront precinct.

3) Psychographic (lifestyle and behaviour)

Psychographic segmentation is based on how customers live and behave. This often explains why people buy.

• Lifestyle: sporty, outdoors, luxury, health-focused, busy schedules
• Values: convenience, sustainability, status, quality
• Interests: fitness, gaming, fashion, cars, travel
• Behaviour: loyal vs first-time, frequent vs occasional, price-sensitive vs not

Examples

• An ice-bath studio targets people into recovery + performance who book regular sessions (lifestyle + behaviour).
• A premium barber targets customers who value appearance + experience and book repeat appointments (values + behaviour).
• A fast-food brand targets convenience seekers (quick meals) and late-night customers (behaviour).
• A sustainable clothing brand targets customers who value eco-friendly choices (values).

Students often mix these up. Here’s the difference:

Memory tip: Segmentation = “sorting”. Target market = “selecting”.