Different variables are used to segment the consumer markets. They can be broadly put into four categories. (see fig below)
Fig : Bases of Market Segmentation
DEMOGRAPHIC SEGMENTATION: Demos means people and graphein means to measure or to study. In Demography means the study of people or population. In Demographic segmentation, the market is segmented based on demographic variables such as age, sex, family size, family life cycle, income, occupation, education, etc. Demographic variables or characteristics are the most popular bases for segmenting the market.
(a) Age: Age is an important factor for segmenting the market. This is because demand and brand choice of people change with age. Based on age, a market can be divided into four- Children, Teenagers, Adults, and Grown-ups. For consumers of different age groups, different types of products are produced. Johnson and Johnson cater to the needs of children below 6 years by presenting baby powders, baby soaps, oils, etc.
(b) Sex: Sex-based segmentation means grouping customers into males and females. The wants, tastes, preferences, interests, choices, etc, of men, are different from that of women. For instance, women are more fond of cosmetics and other fancy articles. Marketers use gender differences in marketing garments, personal care products, bikes, cosmetics, and magazines.
(c) Family Life Cycle: It refers to the important stages in the life of an ordinary family. Broadly divided into the following stages.
Stage 1: Childhood.
Stage 2: Bachelorhood (unmarried).
Stage 3: Honeymooners- Young married couple.
Stage 4: Parenthood- (a) Couple with children. (b) Couple with grown-up children.
Stage 5: Post- parenthood- Older married couple with children living away from Parents (due to job or marriage of sons and daughters).
Stage 6: Dissolution- One of the partners is dead.
Wants, tastes, interests, buying habits, etc vary over different life cycles stages.
(d)Religion: Religious differences have an important effect on marketing. The male folk among the Muslims have a demand for striped lungis and the woman folk for pardhas.
(e) Income: Income segmentation is used for automobiles, clothing, cosmetics, travel, financial services, etc. For example, BMW (car manufacturer concentrates on the high-income segment)
(f) Occupation: Market segmentation is done also based on the occupation of consumers. For instance, doctors may demand Surgical equipment, lawyers may demand coat, etc.
(g) Family Size: A marketer launches different sizes of products in the market according to the size of the family. For example, shampoos and oil are available in 100 ml. 200ml. 500ml etc.
(h) Education: Based on education, the market for books may be divided as high school, plus two, graduate and postgraduate.
GEOGRAPHIC SEGMENTATION: The marketer divides the market into different geographical units. Generally international companies segment markets geographically. The theory behind this strategy is that people who live in the same area have some similar need and wants and that needs and wants to differ from those of people living in other areas.
(a) Area: This type of segmentation divides the market into different geographical units such as country, state, region, district, area, etc. Some manufacturers split up their sales territories either state-wise or district-wise. Markets may also be divided into urban and rural markets.
(b) Climate: Different types of climate prevail in different places. Based on climate, areas can be classified as a hot, cold, humid and rainy region. Climate determines the demand for certain goods.
(c) Population Density: The size and density of the population affect the demand for consumer goods. In those areas where size and density of population are high, there will be good demand for consumer goods.
BEHAVIOURAL SEGMENTATION: Behavioural segmentation is based on buyer behaviour i.e. the
way people behave during and after purchase.
(a) Attitude: Customers can be segmented based on attitude such as enthusiastic, positive, indifferent, negative, hostile, etc. Fashionable and latest products are used by enthusiastic consumers. Liquor, cigarette, etc are used by negative consumers.
(b) Product Segmentation: The market segmentation is done based on product characteristics that are capable of satisfying certain special needs of customers.
(1) Prestige products, e.g., Automobiles, clothing, home furnishing.
(2) Maturity products, e.g., Cigarettes, Blades, etc.
(3) Status products, e.g., Most luxuries.
(4) Anxiety products, e.g., Medicines, soaps, etc.
(5) Functional products, e.g., Fruits, vegetables, etc.
(c) Occasion Segmentation: According to the occasions, buyers develop a need, purchase a product or use a product. There can be two types of situations- regular and special. For example, for regular use, women purchase cotton or polyester sarees or churidars. For attending marriage or reception(special occasion) they buy silk sarees.
(d) Benefit Segmentation: Benefit segmentation implies satisfying one benefit group. The benefit may be classified into Generic or Primary and Secondary or Evolved.
(a) Age: Age is an important factor for segmenting the market. This is because demand and brand choice of people change with age. Based on age, a market can be divided into four- Children, Teenagers, Adults, and Grown-ups. For consumers of different age groups, different types of products are produced. Johnson and Johnson cater to the needs of children below 6 years by presenting baby powders, baby soaps, oils, etc.
(b) Sex: Sex-based segmentation means grouping customers into males and females. The wants, tastes, preferences, interests, choices, etc, of men, are different from that of women. For instance, women are more fond of cosmetics and other fancy articles. Marketers use gender differences in marketing garments, personal care products, bikes, cosmetics, and magazines.
(c) Family Life Cycle: It refers to the important stages in the life of an ordinary family. Broadly divided into the following stages.
Stage 1: Childhood.
Stage 2: Bachelorhood (unmarried).
Stage 3: Honeymooners- Young married couple.
Stage 4: Parenthood- (a) Couple with children. (b) Couple with grown-up children.
Stage 5: Post- parenthood- Older married couple with children living away from Parents (due to job or marriage of sons and daughters).
Stage 6: Dissolution- One of the partners is dead.
Wants, tastes, interests, buying habits, etc vary over different life cycles stages.
(d)Religion: Religious differences have an important effect on marketing. The male folk among the Muslims have a demand for striped lungis and the woman folk for pardhas.
(e) Income: Income segmentation is used for automobiles, clothing, cosmetics, travel, financial services, etc. For example, BMW (car manufacturer concentrates on the high-income segment)
(f) Occupation: Market segmentation is done also based on the occupation of consumers. For instance, doctors may demand Surgical equipment, lawyers may demand coat, etc.
(g) Family Size: A marketer launches different sizes of products in the market according to the size of the family. For example, shampoos and oil are available in 100 ml. 200ml. 500ml etc.
(h) Education: Based on education, the market for books may be divided as high school, plus two, graduate and postgraduate.
GEOGRAPHIC SEGMENTATION: The marketer divides the market into different geographical units. Generally international companies segment markets geographically. The theory behind this strategy is that people who live in the same area have some similar need and wants and that needs and wants to differ from those of people living in other areas.
(a) Area: This type of segmentation divides the market into different geographical units such as country, state, region, district, area, etc. Some manufacturers split up their sales territories either state-wise or district-wise. Markets may also be divided into urban and rural markets.
(b) Climate: Different types of climate prevail in different places. Based on climate, areas can be classified as a hot, cold, humid and rainy region. Climate determines the demand for certain goods.
(c) Population Density: The size and density of the population affect the demand for consumer goods. In those areas where size and density of population are high, there will be good demand for consumer goods.
BEHAVIOURAL SEGMENTATION: Behavioural segmentation is based on buyer behaviour i.e. the
way people behave during and after purchase.
(a) Attitude: Customers can be segmented based on attitude such as enthusiastic, positive, indifferent, negative, hostile, etc. Fashionable and latest products are used by enthusiastic consumers. Liquor, cigarette, etc are used by negative consumers.
(b) Product Segmentation: The market segmentation is done based on product characteristics that are capable of satisfying certain special needs of customers.
(1) Prestige products, e.g., Automobiles, clothing, home furnishing.
(2) Maturity products, e.g., Cigarettes, Blades, etc.
(3) Status products, e.g., Most luxuries.
(4) Anxiety products, e.g., Medicines, soaps, etc.
(5) Functional products, e.g., Fruits, vegetables, etc.
(c) Occasion Segmentation: According to the occasions, buyers develop a need, purchase a product or use a product. There can be two types of situations- regular and special. For example, for regular use, women purchase cotton or polyester sarees or churidars. For attending marriage or reception(special occasion) they buy silk sarees.
(d) Benefit Segmentation: Benefit segmentation implies satisfying one benefit group. The benefit may be classified into Generic or Primary and Secondary or Evolved.
Product Generic or primary Secondary or Evolved
Utilities Utilities
Toothpaste Cleaning Breath freshening, brightness.
Utilities Utilities
Toothpaste Cleaning Breath freshening, brightness.
(e) Volume Segmentation: The market is segmented based on the volume or quality of the purchase. The buyers are grouped into categories like bulk buyers, moderate buyers, and small buyers. Heavy buyers are often a small percentage of the market but account for a high percentage of total consumption. Marketers prefer to attract one heavy buyer rather than several small buyers.
(f) Loyalty Segmentation: Consumers have a varying degree of loyalty to specific brands. Based on brand loyalty, buyers can be divided into the following five groups. (1) Hard-core loyal (2) Softcore loyal (3) Shifting loyal (4) Switchers (5) Consumer innovators.
PSYCHOGRAPHIC SEGMENTATION: It refers to the grouping of people into homogeneous segments based on psychological make-up namely personality and lifestyle.
(a) LifeStyle: A person’s lifestyle is the pattern of living as expressed in the person’s activities, interests, and opinions. They express their life styles through the products they use. For example, the life style of a college student is different from that of an ordinary worker. Car, clothing, cosmetics, furniture, liquor, cigarettes, etc. are segmented by using lifestyle
(b) Personality: Personality reflects a person’s traits, attitude, and habits. It is in this background that a person is classified as active or passive, rational or impulsive, creative or conventional, introvert or extrovert. For example, Raymond’s advertisement says “Raymonds. The Complete Man”
(c) Social Class: Based on Social class, consumers may be grouped into the lower class, middle class, and upper class. Social class is determined by income, occupation, and education.
What are the the bases of Market Segmentation?
Reviewed by enakta13
on
September 05, 2019
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Reviewed by enakta13
on
September 05, 2019
Rating: