Market Segmentation

1. Market Selection
Dr. Pooja
Assistant Professor
Dept. of Commerce
AMPGC, BHU
Market Segmentation
Bases for Segmenting Consumer Market

2.  Segmentation is to divide a market composed of consumers with
diverse characteristics and behaviors into homogeneous segments that
contain persons who will all respond similarly to a firm’s marketing
effort.
 This implies that for any classification, scheme to qualify as market
segmentation, the segments must exhibit these behavioral response
differences.

3. Bases
of
Consumer
Market
Segmentation
Geographic Segmentation
Demographic Segmentation
Psychographic Segmentation
Behavioural Segmentation
Volume Segmentation
Product Space Segmentation
Benefit Segmentation

4.  This segmentation is based on places or locations where consumers reside. Here, market segmentation
calls for dividing the market into different geographical units, such as nations, states, regions, cities, climates,
urban/village, etc. Needs and preferences differ significantly at different places. So, a company may operate in
one or more geographical area as per its capacity.
1. Local Market:
2. Urban Market:
3. Rural Market:
4. Regional or State Market:
5. National Market:
6. International or Global Market:
7. Climate/Weather:
 Thus, a company should formulate marketing strategy as per its market in different geographical areas.
Product, price, promotion, and distribution decisions are considerably affected by geographic segmentation.

5.  In demographic segmentation, the market is divided on the basis of demographic variables, such as
age, gender, family size, income, occupation, etc. It is the most popular and widely practiced set of bases.
Needs, wants, preferences, and usage rate are highly associated with demographic variables. Also, it is
comparatively easy to identify and measure market by demographic variables.
1. Age
2. Gender
3. Size of Family
4. Family-Life-Cycle
5. Income
6. Education
7. Castes and Social Classes
8. Profession/Occupation
9. Religion
10. Nationality

6.  In psychographic segmentation, the market is divided into different groups on the
basis of psychographic characteristics of buyers, like social class, life style, perception,
learning, attitudes, and personality. Psychological characteristics refer to the inner or
intrinsic qualities of the individual consumer. Consumers within same geographic and
demographic group can exhibit quite different psychographic profile. Psychographic
segmentation mainly involve following bases:
1. Social Class:
2. Life-style:
3. Personality:
4. Buying Motives:

7.  Such segmentation is also called as consumer response segmentation, behavioural segmentation or
product characteristics-based market segmentation. Clearly, the market is divided on the bases of product
characteristics or consumer response to the products. (Consumer responds differently due varied product
characteristics). The popularly used behavioural bases have been discussed in following part:
 1. Occasions
 2. Benefits received
 3. User Status
 i. Non-users
 ii. Ex-users
 iii. Potential Users:
 iv. First-time Users:
 v. Occasional Users:
 vi. Regular Users:

8.  Consumers are classified light, medium and heavy users of a product. In some cases, 80
per cent of the product may be sold to only 20 per cent of the group. Marketers can decide
product features and advertising strategies by finding common characteristics among heavy
users. For example, airlines having ‘Frequent Flyer’ are using user rate as the basis of market
segmentation. Generally, marketers are interested in the heavy user group.
 But marketers should pay attention to all the user groups because they represent different
opportunities. The non-users may consist of two types of people— those who do not use the
product and those who might use it. Some may change over time from a non-user to a user.
 Those who do not use due to ignorance may be provided extensive information. Repetitive
advertising may be used to overcome inertia or psychological resistance. In this way non-users
can gradually be converted into users.

9.  Here the buyers are asked to compare the existing brands according to
their perceived similarity and in relation to their ideal brands. First, the
analyst infers the latent attributes that consumers are using to perceive
the brand. Then buyers are classified into groups each having a distinct
ideal brand in mind. The distinctive characteristics of each group are
ascertained.

10.  Consumer behaviour depends more on the benefit sought in product/service than on
demographic factors. Each market segment is identified by the major benefits it is seeking.
Most buyers seek as many benefits as possible. However, the relative importance
attached to individual benefits differs from one group to another. Research studies on
benefit segmentation reveal that it is easier to take advantage of existing segment, then to
create new segments. As no brand can appeal to all consumers, a marketer who wants to
cover the market fully must offer multiple brands.
 Consumers’ loyalty pattern can be used for dividing the market. Consumers hold varying
degree of loyalty to the brand. Accordingly, buyers can be divided into four major groups:
 i. Hard core Loyal:
 ii. Soft core Loyal
 Iii. Brand Switchers: