Question

What is the market segmentation?What are the bases for market segmentation? Explain each briefly.

Answer 1

Market segmentation : It can be defined as a process of dividing the target market or the market of the customers into several groups based on their characteristics.

Eg. The anti wrinkle cream will be bought by the ones who are above 40 years old and are turning old, so we will target only the ones who are 40 years above.

This process helps the business as it can easily reach its customers with specific needs.

Bases for market segmentation

There are 4 bases

1. Demographic: It helps in dividing the market into several smaller segments on the basis of demographic factors which include

a. Age

b. Gender

c. Income

d. Location

e. Education

f.Ethnicity

2. Psychographic : It helps to divide the customers on the basis of the factors that relate to the personalities of a particular person.

Such factors include

a. Values

b. Attitude

c. Lifestyle

d. Interests

e. Motivations

f. Priorities

3. Behavioural: It can be defined as the process of dividing the customers on the basis of their behaviour ie how a customer acts or responds.

These factors include

a. Purchasing habits

b. Spending habits

c. Brand interactions

d. User status

4. Geographic : It is the process of dividing the customers on the basis of geographic borders .

These factors include

a. City

b. Country

c. ZIP code

d. Climate

e. Rural or urban