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Market segmentation & Bases for segmentation of customer market

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Market segmentation & Bases for segmentation of customer market


Market segmentation:
Normally market segmentation means divide the entire market based on different characteristics. Like Demographic Geographic Psychographic etc.

Market segments can be characterized in different ways on way is to characterize the preferences of the target customers; homogeneous preferences, referring to customers that roughly have the same preferences. Secondly there are diffused preferences which mean that the customers vary in their preferences and finally clustered preferences which mean that the natural market segments emerge from groups of consumers with shared preferences (Kotler and Keller).

Bases for segmentation of customer market:
The group who consume product or service for final consumption from customer market. The bases for segmenting customer market are as follows:

1. Demographic segmentation:
The demographic segmentation is often used in market segmentation for the reason that the variables are easy to identify and measure. The demographic segmentation divides customers into segments based on demographic values such as age, gender, family size, family life cycle, income, occupation, education, religion, race, generation, social class and nationality. (Kotler and Armstrong)

  •      Age and life-cycle segmentation: The consumer’s needs and wants change with age. Therefore some companies use age and Life-cycle segmentation. Based on age consumer marker divided different age like 1-5,6-10,10-20,20-35,-35-50,50-rest. Cloth, food, shop, shampoo etc. based on customer age and life-cycle
  •      Gender segmentation: Gender segmentation is used to differentiate the needs and wants between men and women due to the fact that men and women have different attitudes toward a product. Like dress, shoes, food, TV, mobile phone etc.
  •      Income segmentation: Income segmentation divides the market into different income groups. Based on higher lower income group it is used in automobiles, clothing, cosmetics, financial services and travel. Many companies within the mentioned categories seek to target the high-income customers.
  •     Generation segmentation: Each generation is influenced by the times in which they grow up the music, the movies, Politics and other significant events characteristic of that period. Based on marketer segment customer market.
  •         Social Class segmentation Social class segmentation divides the customers according to their preferences in cars, clothing, home furnishings, leisure activities, reading habits and retailers.

2. Geographic segmentation
The geographic segmentation divides customers into segments based on geographical areas such as nations, states, regions, counties, cities or neighborhoods. A company can target one or more areas and must be aware of the fact that data according to geographic segmentation may vary due to population shift (Pick ton and Broderick).  
It is important to segment according to geographic, due to the fact that the purchasing behavior of the customers are influenced on where they live, work etc. (Gunter and Fordham). 
  • World region: Market may be divided based on Asia, Africa, and Europe etc.
  • Country region: Market may be divided based on BD, India, USA, UK etc.
  • City region: Market may be divided based on different city like Mumbai, Dhaka, and Lahore etc.
  • Density: Market may be divided based on town, sub town, village etc.
  • Climate: Market may be divided based on different climate.


3. Psychographic segmentation
The psychological variables derive from two principal types of customer; personality profiles and lifestyle profiles (psychographics). Psychological profiles are often used as a supplement to geographic and demographics when these does not provide a sufficient view of the customer behavior. While the traditional geographical and demographical bases (sex, age, income etc.) provide the marketer with accessibility to customer segments, the psychological variables provide additional information about these and enhance the understanding of the behavior of present and potential target markets (Gunter and Fordham)
  • Social class: Market may be divided based on high, low, middle class.
  •  Life style: Market may be divided based on high ambition, genetic struggler etc.
  • Personality: Market may be divided based on duality person, freedom, conservative, empowering man etc.

4. Behavioral segmentation
Behavioral segmentation is based on the customers’ attitude toward, use of, or response to a product. Many marketers believe that the behavioral variables such as occasions, benefits, user status, usage rate, buyer-readiness stage, loyalty status and attitude are the best starting points for constructing market segments and thus these variables will be described further in the following (Kotler and Keller, 2009: 263). 



  •  Occasions: Occasions are when the customers are divided into segments based on the time of day, week, month and year
  • Benefit: Benefit segmentation seeks to find the benefits people look for in a certain product the kinds of people who look for each benefit and the brands that deliver each benefit.
  • User status: By segmenting according to nonusers, ex-users, potential users, first-time users and regular users of a certain products a company can customize its marketing for each group
  • Buyer-Readiness stage: usage rate segmentation divides the customers according to how much they use a product like, light, medium and heavy product users and companies.
  • Attitude: As a final variable to the behavioral segmentation is attitude toward a product. People can be divided into segments based on whether they have an enthusiastic, positive, indifferent, negative or hostile attitude toward a product.  
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