People in this world live with different background, interests, needs, personalities, culture etc.  Can a single product satisfy everyone needs and desire? Does this represent a problem for a marketer? The answer to this question is no. diversity doesn’t portray problem but rather it serves as a pool of opportunities and give rise to market segmentation. It is defined as a process of dividing market into identifiable group of similar consumer. Basically it formulates the customer base into distinctive subsets. Although a profitable segment is one that has a large enough population with sufficient money to spend.

As the time changes and marketing evolves the one-size-fit-all approach changes into more sophisticated tailored segmentation approach. This change has not only benefit the consumer and provides him with the enormous choices of brands for a particular need but it becomes easier for marketers to direct its activities towards the customer  base, who are potential buyers and more loyal to their brand. Marketing segmentation is a more focused approach that helps marketers to differentiate their product that would cater to specific need or want. As segmentation is used to discover the need and want of a specific group therefore it also contributes to formulate the message accordingly and choose mediums too.

Major segmentation Basis

There are three distinctive basis for market segmentation including (1) Geographic and Demographic (2) Psychographic (3) and Behavioral.

Geographic segmentation divides the customer group on basis of their location, region, country, culture, climate etc. Demographic identify customer on basis of age, gender, income level, marital status, family cycle, educational level, occupation etc.

Psycho-graphical segmentation focuses on basis of customer activities (how they spend time), their interests (preferences and priorities) and opinions (how they feel towards a brand or an event).
Behavioral segmentation divides customer base on differences in their knowledge, attitudes, responses and use of a product/brand.

Marketers often choose to operate and target with more than one segment at a time. Based on the segmentation approach, a marketer may choose undifferentiated, differentiated or concentrated/niche marketing strategy. At times company may want to reevaluate the segments it was previously catering to. There can be reasons to do so such as the targeted segment has shrunk over a period of time or new segments have emerged signaling more potential and growth for the company. Therefore in such situations marketers seek for more generic need that can be applied to more segments, enhancing the overall size of targeted segment.  Sometimes company offer different SKU’s for different price range to penetrate into more segments.

Assessment to Market Segments

When the marketer divides the customer base on basis of one of the approaches, then as a result numerous segments emerge. Now the concern for a company is to whom it should target. Certain criterion should be considered before selecting a segment. Because such factors influence the overall market position, growth, profitability of that company. Segment should represent sufficient number of people with buying potential, relatively stable in terms of demographic and signify growth, accessible for marketer to reach in economical way.



Schiffman L. Kaunk L (2007) “market segmentation” Consumer Behavior ninth Ed New York, Prentice hall, pg 42-62

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