Market segmentation involves dividing a heterogeneous market into smaller, more homogeneous segments based on shared characteristics. It allows businesses to tailor their marketing efforts to specific customer groups. The key bases used for segmentation include demographic factors, geographic location, psychographic traits, behavioral patterns, price sensitivity, and usage rates. Combining multiple bases can provide a more precise segmentation strategy for enhanced customer understanding and improved resource allocation.

1. MARKET
SEGMENTATION

2. INTRODUCTION TO MARKET SEGMENTATION
• Definition: Market segmentation is the process of dividing
a heterogeneous market into smaller, more manageable
segments based on shared characteristics.
• It allows businesses to tailor their marketing efforts to
specific groups of customers.

3. WHY DO WE NEED MARKET SEGMENTATION?
• Addressing Heterogeneity: Markets are diverse, and
customers have varied needs and preferences.
• Targeted Marketing: Segmentation enables businesses to
target specific customer groups with customized
marketing strategies.
• Enhanced Efficiency: It leads to efficient resource
allocation by focusing efforts where they are most
effective.

4. BENEFITS OF MARKET SEGMENTATION
• Enhanced Customer Understanding: Deeper insights into
customer needs and behaviors.
• Customized Marketing: Tailoring marketing efforts to specific
segments.
• Improved Resource Allocation: Efficient use of resources.
• Competitive Advantage: Ability to meet customer demands
more effectively.

5. BASES FOR MARKET SEGMENTATION
• Definition: Bases for market segmentation are the criteria
or variables used to divide a heterogeneous market into
smaller, more homogenous segments.
• These bases help businesses identify and target specific
customer groups with tailored marketing strategies.

6. DEMOGRAPHIC SEGMENTATION
• Explanation: Dividing the market based on demographic
factors, which include characteristics like age, gender,
income, education, marital status, and family size.
• Example: Targeting luxury products to high-income
individuals or baby products to new parents.

7. GEOGRAPHIC SEGMENTATION
• Explanation: Segmenting the market
based on geographic location, such
as country, region, city, climate, or
urban/rural areas.
• Example: Marketing sunscreen
products in regions with sunny
climates.

8. PSYCHOGRAPHIC SEGMENTATION
• Explanation: Grouping customers based on shared
psychographic traits, including lifestyle, values, attitudes,
interests, and beliefs.
• Example: Promoting adventure sports equipment to thrill-
seekers or eco-friendly products to environmentally
conscious consumers.

9. BEHAVIORAL SEGMENTATION
• Explanation: Segmenting the market based on customers'
behavior, which includes usage patterns, brand loyalty,
purchase history, and the benefits sought.
• Example: Offering discounts to frequent shoppers or
providing premium services to loyal customers.

10. PRICE SEGMENTATION
• Explanation: Dividing the market based on customers'
price sensitivity and willingness to pay for products or
services.
• Example: Offering different pricing tiers for software
subscriptions (e.g., basic, premium, enterprise).

11. USAGE RATE SEGMENTATION
• Explanation: Segmenting the market based on how
frequently customers use a product or service.
• Example: Offering special deals or loyalty programs for
frequent users of a service (e.g., airline frequent flyer
programs).

12. BENEFITS OF EACH BASIS FOR MARKET
SEGMENTATION
• Demographic Segmentation:
• Enhanced targeting precision.
• Better understanding of age and income-related preferences.
• Geographic Segmentation:
• Localization of marketing efforts.
• Catering to climate-specific needs.
• Psychographic Segmentation:
• Tailored messaging to align with consumer values.
• Building stronger emotional connections.

13. • Behavioral Segmentation:
• Improved customer retention.
• Personalized product recommendations.
• Price Segmentation:
• Maximizing revenue by offering pricing options.
• Meeting the budget constraints of diverse customer groups.
• Usage Rate Segmentation:
• Customized marketing to encourage increased usage.
• Building long-term loyalty among frequent users.

14. SELECTING THE RIGHT BASIS FOR YOUR
BUSINESS
• Considerations:
• The nature of your product or service.
• Availability of data.
• Relevance to your target market.
• Emphasize the importance of aligning the chosen basis
with business objectives

15. COMBINING MULTIPLE BASES
• Explanation: Businesses often use multiple bases
simultaneously for a more precise segmentation strategy.
• Example: Combining demographic and behavioral factors
to create a comprehensive customer profile.