Market Segmentation

"The marketer should stop thinking of his customers as part of some massively homogeneous market. He must start thinking of them as numerous small islands of distinctiveness, each of which requires its own unique strategies in product policy, in promotional strategy, in pricing, in distribution methods, and in direct selling techniques.”

T. Levitt, Marketing for Business Growth, Mc Graw Hill, New York, 1974, p. 69

Market Segmentation

The overall market is divided into distinct groups of buyers who are likely to respond favorably to different market mixes.

Levels of Market Segmentation

Mass MarketingSame product to all consumers

(no segmentation)

Mass MarketingSame product to all consumers

(no segmentation)

Segment MarketingDifferent products to one or more segments

(some segmentation)

Segment MarketingDifferent products to one or more segments

(some segmentation)

MicromarketingProducts to suit the tastes of individuals and locations

(complete segmentation)

MicromarketingProducts to suit the tastes of individuals and locations

(complete segmentation)

Niche MarketingDifferent products to subgroups within segments

(more segmentation)

Niche MarketingDifferent products to subgroups within segments

(more segmentation)

Local MarketingTailoring brands/ promotions to

local customer groups

Individual MarketingTailoring products/ programs to

individual customers

Demographic Segmentation

• Age• Income• Gender• Race• Marital Status • Education

Geographic Segmentation

• City• Zip Code• State• Region • Country

Psychographic Segmentation

• Social Class• Life Style• Attitude• Values• Interests• Personality

Usage Segmentation

How do customers use your product?• Light• Medium• Heavy• Consumer• Commercial• Industrial