What is Market Segmentation?

The marketing concept calls for understanding
customer and satisfying there needs better than the
competition.
Different customers have different needs, and its
rarely possible to satisfy all the customers by
treating them alike.

Indefinable: the differentiating attributes of the
segments must be measurable so they can be
identified.
Accessible: the segments must be reachable
through communication and distribution channels.

Unique needs: to justify separate offerings, the
segments must respond differently to different
marketing mixes.
Durable: the segments should be relatively stable
to minimize the cost of frequent changes.

Geographic
Demographic
Psychographic
Behaviourial

Geographic segmentation tries to
divide markets into different
geographical units:
 Regions
 Size of the area
 Population density
 Climate

 Regions: by continent, country,
state or even neighborhood.
 Size of the area: segmented
according to size of population.
 Population density: often classified
as urban, suburban, or rural.
 Climate: according to weather
patterns common to certain
geographic regions

Demographic segmentation consists of dividing the
market into groups based on variables such as:
• Age
• Gender
• Income
• Social class
• Life style

 Age : Marketers design, package and promote products
differently to meet the wants of different age groups.
 Gender: Gender segmentation is widely used in
consumer marketing.
 Income: Many companies target affluent consumers
with luxury goods and convenience services.

 Social class: Consumers "perceived" social class influences
their preferences for cars, clothes, home furnishings, leisure
activities and other products & services.
 Lifestyle: Marketers are increasingly interested in the effect of
consumer "lifestyles" on demand. Unfortunately, there are
many different lifestyle categorization systems, many of them
designed by advertising and marketing agencies as a way of
winning new marketing clients and campaigns.

Psychographic segmentation groups customers according
to their lifestyle. Activities, interest, and opinions (AIO)
surveys are one tool for measuring lifestyle.
 Activities
 Interest
 Opinion
 Values

Behavioralistic segmentation is based on actual customer
behavior towards products. Some behavioralistic variable
include:
 Opinions, interests and hobbies
 Degree of loyalty
 Occasions
 Benefits sought
 Usage

 Opinions, interests and hobbies – this covers a huge area and includes
consumers’ political opinions, views on the environment, sporting and
recreational activities and arts and cultural issues.
 Degree of loyalty – customers who buy one brand either all or most of the
time are valuable to firms.
 Occasions – this segments on the basis of when a product is purchased or
consumed.
 Benefits sought – this requires marketers to identify and understand the
main benefits consumers look for in a product.
 Usage – some markets can be segmented into light, medium and heavy user
groups.