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Home » Consumer Market Segmentation

Consumer Market Segmentation

By Richard Daniels Reading Time: 4 mins
Updated May 4, 2021

Consumer Market Segmentation

The consumer market segmentation is not confined to a single method. The market structure is best viewed by the marketer by applying different segmentation variables both in the alone form as well as in the combined form.

Consumer Market Segmentation Variables

  • Geographic Segmentation
  • Demographic Segmentation
  • Psychographic Segmentation
  • Behavioral Segmentation

Geographic Segmentation

The division of the entire market into different geographical units is referred to as geographic segmentation. The units are categorized as regions, states, nations, cities, countries or neighborhoods. Mostly the organizations do business in a few of the above geographic segments, but there are some organizations that operate in the entire geographic market. But the variation in the needs & wants should be focused by these organizations. Effective Business Organizations create a match between the needs of the different geographical areas and its products, promotions, advertising & sales effort while operating in different geographical units.

Demographic Segmentation

In this kind of consumer market segmentation, the entire market is divided into different groups on the basis of the following variables.

  • Age
  • Gender
  • Family Size
  • Family life cycle
  • Income
  • Occupation
  • Education
  • Religion
  • Race
  • Nationality

Organizations mostly used demographic segmentation while segmenting their consumer market. The main reason for this extensive usage is that the needs, wants & usage of customers vary relatively in accordance with the demographic variables. Moreover, it is much easier to measure the demographic variables than any other segmentation variables. The importance of demographic variables is so much that even in case of another type of consumer market segmentation, the demographic aspects are analyzed first to ascertain the target market size along with the effective way to reach there.  It is much easier to measure the demographic variables as compared to other kinds of variables. The demographic segmentation is further divided into the following three categories.

  • Age and Life Cycle Stage:

Under this heading of demographic segmentation, different marketing approaches or different products are offered for different age & life cycle groups. When this kind of segmentation is employed, the security against stereotypes must be ensured by the marketer. There are certain age & life cycle groups that behave in a much similar manner, but in the overall scenario the age element is not regarded as standard one because the needs, buying power, work or family status, health & life cycle of a person are poorly predicted by it. With the changing age, the wants & needs of the customer also change. Still, there are many organizations that are adopting this kind of demographic segmentation.

  • Gender Segmentation:

In this kind of Consumer Market Segmentation, the market is divided on the basis of the sex. There are certain products that facilitate gender segmentation like cosmetics, toiletries, clothing & magazines etc. Moreover more and more areas of the business are promoting gender segmentation including deodorants, automobiles & financial services. The marketing & advertisement for women is enhanced. More & more specialized websites are spreading with this category.

  • Income Segmentation:

In income segmentation, the market is divided into different groups on the basis of income. This kind of segmentation is used by the organizations dealing in clothing, financial services, cosmetics, automobiles, and boats & traveling. By using this kind of segmentation, it is not compulsory for the marketer of the organization to target the affluent customers. The customers related to other income groups are also regarded as viable & profitable ones.

Psychographics Segmentation

In psychographic segmentation, the entire market is divided into various groups on the basis of lifestyle, social class or personal characteristics. The customers who fall in the same demographic category may differ on the psychographic grounds. For example the variable lifestyle greatly affects the interest of the customers in the purchasing or certain products and the purchased products resultantly express their lifestyles. Psychographic segmentation is promoted among many organizations as an effective type of consumer market segmentation. Moreover, the market is also usefully segmented on the basis of personality variables. The personalities of the products are designed in accordance with the personalities of the customers.

Behavioral Segmentation

In this kind of consumer market segmentation, the market is grouped on the basis of knowledge of the customers, their attitudes and responses to a product. It is usually believed that the variables of the behavior aspect are regarded as the most effective starting point for developing market segments. In occasion segmentation, the market is divided on the basis of occasion when the customers purchase the product and use it. In benefit segmentation, the market is grouped on the basis of the benefits that are searched by the customers in his purchase of a particular kind of product. Many organizations are using benefit segmentation by identifying the appealing benefits and their characteristics. Use status is another kind of market segmentation in which the market is categorized in groups of ex-users, non-users, first time users, potential users etc.

Moreover the market can also be divided on the basis of usage rates like, light, medium and heavy. The loyalty status is another way of segmenting the market. Also the loyalty factor of the customer is the basic point of grouping them into a completely loyal group, partially loyal group and non-loyal one. Targeting of multiple segments is becoming popular day by day that not only increases the basic knowledge of the customers. However also ensures the competitive advantage for the organization.

Author at Business Study Notes
Richard DanielsAuthor at Business Study Notes

Hello everyone! This is Richard Daniels, a full-time passionate researcher & blogger. He holds a Ph.D. degree in Economics. He loves to write about economics, e-commerce, and business-related topics for students to assist them in their studies. That's the sole purpose of Business Study Notes.
Love my efforts? Don't forget to share this blog.

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Filed Under: Marketing, Principle of Marketing Tagged With: basis of market segmentation, basis of segmentation with examples

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