Market segmentation is the division of a market into several groups on the basis of common characteristics of consumers. So the identification of important characteristics of consumers of a market is of extreme importance for a marketing manager. These characteristics allow the marketing manager to divide the consumers of his firm into different segments.
Bases for Market Segmentation
There may be several bases for market segmentation. These bases may differ from product to product and firm to firm.
For example, the bases for segmenting the markets of consumer products can be the age, income, gender, education, family unit etc. of consumers.
On the other hand, the market of Industrial Products can be segmented on the bases of nature, size, and location etc. of the market.
Bases for Consumer Products
The bases for segmenting the market of consumer products can be divided into following four parts 1. social economic factors 2. geographical factors 3. personality factors and 4. consumer behaviour factors.
The details in this regard as follows:
Socio-Economic Factors
Socio-economic factors are the most common factors for segmenting the market of consumer products.
These pictures can be explained as under:
1. Gender
Gender very important criteria for segmenting a market. On the basis of gender, the market can be divided into two parts 1. Ladies and 2. Gents.
As ladies and gents have different needed and attitudes, the marketers can penetrate their markets on the basis of gender.
Some products may be produced especially for gents and some other products may be produced specially for ladies, such as lipstick for ladies and chips for gents. While selling to ladies, the stress should be upon fashion, beauty, packing and colour, etc.
Related: 23 Importance or Benefits of Market Segmentation (Explained).
On the other hand, while selling The Gents, stress should be upon durability, utility, family standard and social Prestige etc.
2. Age
Age is perhaps the most important criteria for segmenting a market.
The market can be divided into four parts on the basis of age -1. Children 2. Young 3. Adults and 4. Old.
A successful marketing manager is one who understands the age group for which his product would be most suited and determines his marketing policy, pricing policy, and Advertising policy, accordingly.
For example, different sizes of the toothbrush are prepared for consumers of different age.
3. Income
Income is Another and very important factor affecting the nature, attitudes, preferences and behaviour of consumers.
Therefore, a market can be segmented on the basis of income from consumers.
Consumers can be divided into three parts on the basis of income 1. High-income group 2. Middle-income group 3. low-income group.
The consumers of high-income group stress upon the design, fashion, quality and the feeling of social Prestige.
The consumers of middle-income group stress upon the durability and utility products, while the consumers of low-income group stress upon the price and quality.
Different models of television sets are examples of this type of market segmentation.
4. Educational Standard
Some particular products, mainly books and stationery, are sold in the market on the basis of the educational standard of consumers.
A market can be segmented into 7 parts on the basis of educational standard – 1. Primary 2. Junior High School 3. High School, 4. Intermediate, 5. Graduate, 6. Postgraduate and 7. Competitive and Professional.
Different pricing policies and Advertising policies may be adopted for different segments of the market.
Related: How to Choose Right Advertising Media Decision (15 Key Factors).
5. Size of Family
A market can be segmented on the basis of the size of the family also.
A unit of the family may be large or medium or small in size.
The needs of every size of the family are different. Refrigerators and cookers are produced in different sizes for the families of different sizes.
6. Caste or Religion
A country having the number of varieties of communities, caste, sub-caste, and religion.
The feelings attitudes and lifestyles of the consumers of different castes and religions are different.
Therefore, a market can be segmented on the basis of caste or religion.
Objectives of Market Segmentation.
7. Business or Profession
It is also an important social variable and the market of a product can be divided on the basis of these variables also.
Businessman, employed persons and professionals are examples of such classification.
Employed persons may be further be subgrouped as clerks, officers, teachers, executives, judges, and army personnel. Similarly, professionals maybe subgrouped as doctors, advocates, Chartered Accountants etc.
The needs, attitudes and preferences of all these customers are different.
Bonus: Product Orientation and Consumer Orientation – Explained.
8. Geographical Factors
The second most important and popular criteria/bases for segmenting the marketing of a product may be the geographical factors of the market.
On the basis of this criteria, a market may be segmented as the rural, town and urban, National and international, hill and plain, or Hot and Cold etc.
Segmentation of a market on the basis of geographical factors is useful where the customers are scattered over a vast area and the production of the enterprise is at large scale and appropriate arrangements may be made by the Enterprise to make the products available in these different segments.
9. Psychographic or Personality Factors
Different consumers of a product have a different personality. The thinking, attitudes and buying motives of different consumers are different.
Therefore, a market can also be segmented on the basis of psychographic factors and different marketing strategies may be adopted for different consumers.
Some are the consumers who buy a product because it adds to their social Prestige and status, while some consumers buy a product because it is useful to them.
Related: 14 Importance of Marketing in the Modern World (Update).
10. Consumer Behaviour Factors
Consumer behaviour may also be a base for segmenting a market. Following three factors are included in the factors relating to consumer behaviour:
- Usage rate,
- Buying motives and
- Brand loyalty.
On the basis of usage rate, the consumers may further be divided into four parts 1. Non-users, 2. Light users, 3. Middle users 4. Heavey users.
Buying motives mean the motives which affect a consumer, such as the quality of goods, reliability of goods, social Prestige etc, Customers may also be divided on the basis of the loyalty to a particular brand. 13 Needs and Characteristics of Motivation Research.
Bases for Industrial Products
Industrial Products are the products which are used in the industry for producing a product. Industrial Products are not meant for direct consumption.
The market of Industrial Products is also very large and the customers of Industrial Products may also be segmented on different bases.
Important bases for segmenting the market for Industrial Products are as under:
1. Kinds of Business
When an enterprise produces or provides a number of different products and services, the market can be segmented on the basis of kinds of business.
For example, the business of an insurance company can be divided into fire insurance and general insurance.
Different marketing policies and programmes may be prepared for these segments.
Bonus: 37 Essential Qualities of a Successful Entrepreneur (Must Know).
2. The Size of the Buyers
The market of an industrial product can be divided on the basis of the size of the buyers. From this point of view, there may be large buyers or small buyers.
The needs and attitudes of these buyers are different.
3. Geographical Location of the Buyers
Market of Industrial Products can be divided on the basis of the geographical location of buyers also.
The geographical location of its the cost of transportation.
The climate of the area of the buyers affects his needs.
4. Purchasing Procedure of the Buyers
The buyers of Industrial Products are very conscious and choose.
Some buyers adopt a very systematic and sound system of making purchases while some other buyers do not pay much attention to it.
Different marketing policies must be prepared for these customers.
Thus, now you know all criteria or bases for market segmentation.
