Ahmad Zaman

M.Com 1st semester

Market Segmentation

What is Segmentation ?

Segmentation refers to a process of dividing a large unit into various small units which have more or less similar or related characteristics.

Market segmentation 

Market segmentation means dividing the total market for a product into different parts i.e segments on certain bases and using each segment fully for the purpose of marketing and sales promotion.

Market Aggregation

5

The market

•No segmentation•heterogenous customers•homogenous product•no differentiation

Segmentation

6

S-1

S-2

S-3

It is dividing the market into distinct group of customers with similar requirements

Segments must be

• Identifiable• Measurable• Accessible,

reachable

• Substantial enough

• Unique enough

• Durable/stable

Segments must be

• Identifiable• Measurable• Accessible,

reachable

• Substantial enough

• Unique enough

• Durable/stable

Good market segmentation has internally

homogenous members and

is externally heterogeneous

,

Basic featuresNeeds and wants,Financial position i.e purchasing power,Willingness to buy,Likes and dislikes andSocial and cultural background.

Benefit of market segmentationIn market segmentation , we first identify the

wants of the customers with in a sub market and then decide if it is practical to develop a marketing mix to satisfy those want and the company also earn more profit.

Geographic SegmentationIn geographical segmentation, market is

divided into different geographical units like:

Regions (by country, nation, state, neighborhood)

Population Density (Urban, suburban, rural)City size (Size of area, population size and

growth rate)Climate (Regions having similar climate

pattern

Demographic Segmentation

In demographic segmentation, market is divided into small segments based on demographic variables like:

AgeGenderIncomeOccupationEducationGenerationFamily sizeReligionNationality

Psychographic SegmentationIn Psychographic Segmentation, segments are

defined on the basis of social class, lifestyle and personality characteristics.Psychographic variables include:

InterestsOpinionsPersonalitySelf ImageActivitiesValuesAttitudes

Behavioral SegmentationIn this segmentation market is divided into

segments based on consumer knowledge, attitude, use or response to product.Behavioral variables include:

Usage RateProduct benefitsBrand LoyaltyPrice ConsciousnessOccasions (holidays like mother’s day, New Year

and Eid)User Status (First Time, Regular or Potential)

Behavioral Segmentation

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