Bases of Market Segmentation

It is widely thought in marketing that than segmentation is an art, not a science. The key task is to find the variable, or variables that split the market into actionable segments.

There are two types of segmentation variables:
(1) Needs
(2) Profilers

The basic criteria for segmenting a market are customer needs. To find the needs of customers in a market, it is necessary to undertake market research.

Profilers are the descriptive, measurable customer characteristics (such as location, age, nationality, gender, income) that can be used to inform a segmentation exercise.

The most common profilers used in customer segmentation include the following:
Profiler Examples
Geographic

  • Region of the country
  • Urban or rural

Demographic

  • Age, sex, family size
  • Income, occupation, education
  • Religion, race, nationality

Psychographic

  • Social class
  • Lifestyle type
  • Personality type

Behavioural

  • Product usage – e.g. light, medium ,heavy users
  • Brand loyalty: none, medium, high
  • Type of user (e.g. with meals, special occasions)