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Market Segmentation

Market Segmentation

What is market segmentation? If you want to sell a product, first you have to segment the market. That means, you have to partition the market into portions which are different. If your company makes a good segmentation, you can better satisfy the needs of your potential customers.

Why do you need market segmentation? The marketing concept needs the market segmentation for understanding customers and satisfying their needs.

Mass Marketing offers the same marketing mix to all customers. This isn’t a good concept, because no company can make their products to the satisfaction of each customer. A company which makes their products for one or two customer groups will get the customers from the company which has Mass Marketing.

Target Marketing recognizes the diversity of customers. This concept is better, because the company tries to enter the desires of its target groups.

What are the requirements of market segments? Not only the practical use of the product is important. Further the company should consider if the product is/has:

Identifiable: the different arguments of the segments must be measurable, in order to differentiate it better

Accessible: the segments must be reachable through communication and distribution channels

Substantial: the segments should be large enough to reach the target with the required resources

Unique needs: the segments must respond differently to the marketing mix, to justify separate offerings

Durable: the segments should be stable to minimize the costs of frequent changes

With good market segmentation you can satisfy the customers.

What are the Bases for segmentation in consumer markets?
Consumer markets are differentiated in:


Geography (Region, Size of metropolitan area, population density, climate)
Demography (Age, Gender, Family size, Family lifecycle, Generation, Income, Occupation, Education, Ethnicity, Nationality, Religion, Social Class)
Psychography (groups custome...

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