In this article, we will discuss about Market Segmentation and all the Basis of Market Segmentation.
What do you mean by market segmentation? Explain the basis of market segmentation.
The basis of market segmentation can be explained as under-
(A) Consumer Market Segmentation:
The persons who purchase different goods and services and directly use them for their personal consumption, are known as consumers. The markets for consumers can be classified using the following bases-
1. Geographical Segmentation:
This kind of marketing segmentation aims for dividing the market into different geographical units such as nations, states, countries, regions, cities, neighbourhoods etc. A company may decide to operate in one or more geographical areas, or to operate in all geographical areas. For example, General Foods Max Well House sells coffee nationally, but it is flavoured regionally. It brings strong coffee for people in the west & light coffee for people in the east.
2. Demographic Segmentation:
This kind of segmentation consists of dividing the markets into separate groups based on variables such as age, gender, income, education etc. The main reason for demographic segmentation is that the wants and usage rate of the consumer greatly depends on the demographic variables. For example, life stage vitamins come in the market in four version according to different age & gender needs. These four stages of vitamins are children formula (4-12 years), Teen’s formula (For teenager), & Adult version (Men’s formula & women’s formula).
3. Psychographic Market Segmentation:
Psychographic Segmentation divides buyers into different groups based on social, class, life style & personality. The social class of the customers have strong effect on preference in cars, cloths, furniture, reading habits etc.
The life style of a person also has strong effect on the taste & preference of the customer. According to Red-book magazine, ‘This consumer makes an ideal target for marketers of health food & fitness products, because she wears more exercise shoes, swallows more vitamins, drinks more diet-soda…….”
The personality of consumers also has a relation with the consumer choice e.g., products such as cosmetics, cigarettes, liquor, credit cards etc. have a relation with the personality of the consumers.
4. Behavioural Segmentation:
This kind of market segmentation is based on the knowledge, attitude, responses, buying rate etc. Actually, the market segment may depend on the behavioural difference of a consumer.
For example, a product like a Tv set or gold necklace can be classified as regular. Similarly, some purchasers look for quality, some look for service & others look for economy.
(B) Industrial Market Segmentation:
The concept of Industrial market segmentation is applicable in case of business men who produce goods or buy goods for resale purpose. Th different types of industrial market segmentation can be pointed out as follows-
1. Market Segmentation on the basis of kind of business or activity:
Markets can be segmented on the basis of the kind of business or activity which a businessman carries out. On this basis markets can be segmented for different kinds of industrial customers such as agriculture-based customers, mining based customers, government customers, private customers etc.
2. Market Segmentation on the basis of purchasing procedure:
Industrial Markets can be segmented on the basis of the general purchasing procedure of the purchaser. In this case the market is segmented according to the general purchasing policies such as leasing, service contracts, scaled bidding, centralised or decentralised purchase etc. In this case focus is also made on matters such as whether the products are engineering based or non-engineering based.
3. Market Segmentation on the basis of geographical location:
Industrial Markets are often segmented on the basis of the geographical location of the industrial customers. Generally, the marketing, transportation, warehousing and promotional strategies of closely located industrial customers are highly different from the policies and strategies to be used for far-located industrial customers.
4. Market Segmentation on the basis of size & volume of purchaser:
Different industrial customers do not buy goods and services in equal quantities. Some industrial customers buy more, while some buy less. On the basis of volume of purchase, industrial purchasers can be classified as large scale industrial purchaser, medium scale industrial purchaser and small scale industrial purchaser.
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