The four bases for segmenting consumer market are as
follows: A. Demographic Segmentation B. Geographic Segmentation
C. Psychographic Segmentation D. Behavioural Segmentation.
A. Demographic Segmentation:
Demographic segmentation divides the markets into groups based on
variables such as age, gender, family size, income, occupation,
education, religion, race and nationality. Demographic factors are the
most popular bases for segmenting the consumer group. One reason is
that consumer needs, wants, and usage rates often vary closely with
the demographic variables. Moreover, demographic factors are easier
to measure than most other type of variables.
1. Age:
It is one of the most common demographic variables used to segment
markets. Some companies offer different products, or use different
marketing approaches for different age groups. For example,
McDonald’s targets children, teens, adults and seniors with different
ads and media. Markets that are commonly segmented by age includes
clothing, toys, music, automobiles, soaps, shampoos and foods.
2. Gender:
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Gender segmentation is used in clothing, cosmetics and magazines.
3. Income:
Markets are also segmented on the basis of income. Income is used to
divide the markets because it influences the people’s product
purchase. It affects a consumer’s buying power and style of living.
Income includes housing, furniture, automobile, clothing, alcoholic,
beverages, food, sporting goods, luxury goods, financial services and
travel.
4. Family cycle:
Product needs vary according to age, number of persons in the
household, marital status, and number and age of children. These
variables can be combined into a single variable called family life cycle.
Housing, home appliances, furniture, food and automobile are few of
the numerous product markets segmented by the family cycle stages.
Social class can be divided into upper class, middle class and lower
class. Many companies deal in clothing, home furnishing, leisure
activities, design products and services for specific social classes.
B. Geographic Segmentation:
Geographic segmentation refers to dividing a market into different
geographical units such as nations, states, regions, cities, or
neighbourhoods. For example, national newspapers are published and
distributed to different cities in different languages to cater to the
needs of the consumers.
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Geographic variables such as climate, terrain, natural resources, and
population density also influence consumer product needs. Companies
may divide markets into regions because the differences in geographic
variables can cause consumer needs and wants to differ from one
region to another.
C. Psychographic Segmentation:
Psychographic segmentation pertains to lifestyle and personality
traits. In the case of certain products, buying behaviour predominantly
depends on lifestyle and personality characteristics.
1. Personality characteristics:
It refers to a person’s individual character traits, attitudes and habits.
Here markets are segmented according to competitiveness, introvert,
extrovert, ambitious, aggressiveness, etc. This type of segmentation is
used when a product is similar to many competing products, and
consumer needs for products are not affected by other segmentation
variables.
2. Lifestyle:
It is the manner in which people live and spend their time and money.
Lifestyle analysis provides marketers with a broad view of consumers
because it segments the markets into groups on the basis of activities,
interests, beliefs and opinions. Companies making cosmetics, alcoholic
beverages and furniture’s segment market according to the lifestyle.
D. Behavioural Segmentation:
In behavioural segmentation, buyers are divided into groups on the
basis of their knowledge of, attitude towards, use of, or response to a
product. Behavioural segmentation includes segmentation on the basis
of occasions, user status, usage rate loyalty status, buyer-readiness
stage and attitude.
1. Occasion:
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Buyers can be distinguished according to the occasions when they
purchase a product, use a product, or develop a need to use a product.
It helps the firm expand the product usage. For example, Cadbury’s
advertising to promote the product during wedding season is an
example of occasion segmentation.
2. User status:
Sometimes the markets are segmented on the basis of user status, that
is, on the basis of non-user, ex-user, potential user, first-time user and
regular user of the product. Large companies usually target potential
users, whereas smaller firms focus on current users.
3. Usage rate:
Markets can be distinguished on the basis of usage rate, that is, on the
basis of light, medium and heavy users. Heavy users are often a small
percentage of the market, but account for a high percentage of the
total consumption. Marketers usually prefer to attract a heavy user
rather than several light users, and vary their promotional efforts
accordingly.
4. Loyalty status:
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Buyers can be divided on the basis of their loyalty status—hardcore
loyal (consumer who buy one brand all the time), split loyal
(consumers who are loyal to two or three brands), shifting loyal
(consumers who shift from one brand to another), and switchers
(consumers who show no loyalty to any brand).
5. Buyer readiness stage:
The six psychological stages through which a person passes when
deciding to purchase a product. The six stages are awareness of the
product, knowledge of what it does, interest in the product, preference
over competing products, conviction of the product’s suitability, and
purchase. Marketing campaigns exist in large part to move the target
audience through the buyer readiness stages
