It is not
possible to develop marketing strategies for every consumer as all of them have
different needs and requirements. Thus, the marketers attempt to identify broad
classes of buyers who have the same needs and will respond similarly to
marketing actions. This ensures that the communication is effectively received by
the targeted audience.
The
segmentation process involves five distinct steps:
1. Finding
ways to group consumers according to their needs.
2. Finding
ways to group the marketing actions—usually the products offered— available to
the organization.
3. Developing
a market-product grid to relate the market segments to the firm’s products or
actions.
4. Selecting
the target segments toward which the firm directs its marketing actions.
5. Taking
marketing actions to reach target segments.
Some of the
bases of market segmentation are:
Geographic Segmentation
In the
geographic segmentation approach, markets are divided into different geographic
units. These units may include nations, states, counties, or even
neighborhoods. Consumers often have different buying habits depending on where
they reside.
Demographic Segmentation
Dividing
the market on the basis of demographic variables such as age, sex, family size,
education, income, and social class is called demographic segmentation. Although
market segmentation on the basis of demographics may seem obvious, companies
sometimes discover that they need to focus more attention on a specific demographic
group. While demographics may still be the most common method of segmenting
markets, it is important to recognize that other factors may be the underlying
basis for homogeneity and/or consumer behavior. The astute marketer will
identify additional bases for segmenting and will recognize the limitations of
demographics.
Psychographic Segmentation
Dividing
the market on the basis of personality and/or lifestyles is referred to as psychographic
segmentation. The determination of lifestyles is usually based on an analysis
of the activities, interests,and
opinions of consumers. These lifestyles are then correlated with the consumers’
product, brand, and/or media usage. For many products and/or services,
lifestyles may be the best discriminator between use and nonuse, accounting for
differences in food, clothing, and car selections, among numerous other
consumer behaviors.
Behavioristic Segmentation
Dividing
consumers into groups according to their usage, loyalties, or buying responses
to a product is behavioristic segmentation. For example, product or brand
usage, degree of use (heavy versus light), and/or brand loyalty are combined
with demographic and/or psychographic criteria to develop profiles of
market segments. In the case of usage, the marketer assumes that nonpurchasers
of a brand or product who have the same characteristics as purchasers hold
greater potential for adoption than nonusers with different characteristics. A
profile (demographic or psychographic) of the user is developed, which serves
as the basis for promotional strategies designed to attract new users.
Benefit Segmentation
In
purchasing products, consumers are generally trying to satisfy specific needs
and/or wants. They are looking for products that provide specific benefits to
satisfy these needs. The grouping of consumers on the basis of attributes sought
in a product is known as benefit segmentation and is widely used.
The process of segmentation:
The segmentation process develops over time and
is an integral part of the situation analysis. It is in this stage that
marketers attempt to determine as much as they can about the market: What needs
are not being fulfilled? What benefits are being sought? What characteristics
distinguish among the various groups seeking these products and services? A
number of alternative segmentation strategies may be used. Each time a specific
segment is identified, additional information is gathered to help the marketer
understand this group. For example, once a specific segment is identified on
the basis of benefits sought, the marketer will examine lifestyle characteristics
and demographics to help characterize this group and to further its
understanding of this market. 
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