Market segmentation is based on fact that
markets are heterogeneous & not homogeneous.
Homogeneous market refer to a market situation
where the prospective buyers of any product are
found to be uniform in their needs, habits,
choices, nature, etc.
Heterogeneous market refer to a market
situation where the prospective buyers of any
product are not found homogeneous in their
needs, habits, choices, nature, etc.
Market segmentation refers to dividing the
heterogeneous markets into smaller customer
groups having certain homogeneous
characteristics. Such as income, age, sex, etc.
They may differ on the basis of income, gender,
age, education, profession, religion, social
class, family life, style, culture etc.
Acc to William J. Stanton
“ Market Segmentation consist of taking the
total heterogeneous market for a product &
dividing it into several sub markets or segments
each of which tends to be homogeneous in all
Acc to Philip Kotler
Market segmentation is the sub-dividing of a
market into homogeneous subset of consumers ,
where any subset may conceivably be selected
as a market target to be reached with a distinct
OBJECTIVES OF M.S
To make grouping of customers on the basis of
their homogeneous characteristics.
To identify the needs, tastes, buying-motives of
To determine marketing strategies, targets &
goals of the firm.
To make the activities of the firm consumer
To identify the areas where the customers may be
created and market area can be expanded.
The main aim of market segmentation is to prepare
separate marketing programmes or strategies for each
segment so that maximum satisfaction to consumers
of different segments may be provided.
Reasons for the development of
Use of cost reducing techniques
Increase in purchasing power
Increase in competition
APPROACHES OF M.S
The marketeers adopt several app. To segment a
App. To market segmentation
In this total market is considered as one segment.
Under mass marketing only one product is
produced & sold in the market for all customers
with help of common marketing programme.
It assumes that there is no significant difference
amongst Consumers in terms of their need &
In this marketing, marketeers uses product
Once marketeers learnt that consumers would
not accept one quality product, the marketeers
try to provide different size, colours, shapes,
features & qualities in his product as per the
needs & wants of the customer of different
It provide different product to different segment
E.g. maruti udyog ltd.
It defined as a set of actual potential buyers of a
product, service or idea .
Target marketing help the marketeer to correctly
identify the market- the groups of consumers for
whom the product is designed.
It has 3 steps :-
Analyse the characteristics of customers
Disaggregate the customers into suitable segments
Formulate different marketing mix for different segments
Feedback of various segments
Select the higher potential segments
Analyse the needs of Customers
BASIS OR CRITERIA OF M.S
The step towards developing a segmentation
strategy is to locate the bases or basis for
segmenting the market.
There are two simple division of product market.
I. Consumer market
On the basis of consumer market
1. Geographical basis
2. Demographic basis
3. Psychological basis
4. Behavioral basis
5. Marketing basis
1) GEOGRAPHICAL BASIS
It is the most simple, convenient, popular,
and usual base for mkt segmentation.
It includes :
2) DEMOGRAPHIC BASIS
Under this basis, a market tries to differentiate
between groups of customers on the basis of
It describe the human characteristics of
consumers. It segment the market on the basis
that how people act.
Consumer behavior may also form the basis of
First time user
Intended to buy
Hard core loyal
Soft core loyal
5) MARKETING BASIS
Marketing conditions also form an important
basis for market segmentation.
There are latest variables used by modern
Degree of competition
Channels of distribution
Buyer with price consciousness
ON THE BASIS OF INDUSTRIAL
1. Type of business activities basis
2. Geographical location basis
3. Usual purchasing procedure basis
4. Size of user
IMPORTANCE OF MS
Knowledge of marketing opportunities
Knowledge of customer needs
Adopting effective marketing programme
Proper allocation of resources
Adjustment in products
Increasing sales volume
Better assessment of the competition
Effective advertising appeals
Enhances marketing efficiency
Benefits to consumers