Market Segmentation

A market is the aggregate of a given product. These consumers vary in their characteritics and buying behaviour. It is thus natural that many different segments occur within a market. Marketers usually divide the heterogenous market for any product into different segements of relatively homogeneous characteritics. The process of fragmenting whole market into sub-markets is known as market segmentation.

Benefits of Market Segmentation:

• Segmentation helps the marketer to distinguish one customer group from another  within a fiven market and therby enables him to decide which segment should form his target market.
• It enables the marketer to identify the real needs of the target buyers and to develop marketing offers that are most suited to each group.
• It makes the marketimng effort more focused, more efficient and economic by concentrating on segments that are most profitable and will be the customers of the market offer.
• It benefits the customer and they can buy specialised products that cater to their specific needs and wants.
• When segmentation attains high sophistication, customers and companies can choose each other and stay together for mutual benefits.

Bases of Segmentation:

Geographic Segementation: Segmenting market on the basis of factors like region, state, district, urban/rural, climate, etc.

Demographic Segmentation: Segmenting cutomers on  the basis of factore like age, sex, martial status, family size and structure, race, religion, community, language, occupation, income, education etc.

Psychographic Segmentation: Segmenting customers on the basis of psychological factors like personality traits, lifestyle, socio-economic classes, value systems etc. The marketing researcher, Emanuel Denby coined the term psychographics.

Behavioural Segementation: Marketers can be segmented on the basis of buyer's behaviour as well. Buying behaviour includes

• User Status: Non-user, ex-user, potential user, first time user, regular user.
• Usage Rate: Bulk buyers, small scale buyers, moderate buyer.
• Benefits: Quality, service, economy, speed.
• Occasions: Regular, special.
• Loyalty Status: Hardcore loyals, split loyals (two or more brands), shifting loyals, switchers.
• Readiness Stage: Unaware, aweare, informed, interested, desirous, intending to buy.
• Attitude: Enthusiastics, positive, indifferent, negative, hostile.

Properties of an Effective Segement:

• Segments must be distinguished from one another.
• Potential demand of the segment should be measurable.
• Segment should be easily accesible and servable.
• Segment should have an apropriate size, i.e. significant number of buyers.
• Segment shoulkd be growing.
• It shoulkd be profitable.
• Segement needs should be compatible with the marketers product utility.