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Understanding Market Segmentation Types

Market segmentation involves dividing a market into subgroups based on characteristics like gender, age, income, or interests. Markets can be segmented in several ways, including demographically. Demographic segmentation divides the market based on variables such as age, gender, family size, income, occupation, education, religion, race, and nationality. These variables are popular segmentation criteria because customer wants correlate with factors like age and income, and demographic data is readily available.

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18 views2 pages

Understanding Market Segmentation Types

Market segmentation involves dividing a market into subgroups based on characteristics like gender, age, income, or interests. Markets can be segmented in several ways, including demographically. Demographic segmentation divides the market based on variables such as age, gender, family size, income, occupation, education, religion, race, and nationality. These variables are popular segmentation criteria because customer wants correlate with factors like age and income, and demographic data is readily available.

Uploaded by

Sikander Jawaid
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© Attribution Non-Commercial (BY-NC)
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Paper January 8, 2011 Q.

3
Define Market Segmentation. In how many ways it can be classified? Discuss briefly the demographic segmentation?

Market segmentation
A market segment is a classification of potential private or corporate customers by one or more characteristics, in order to identify groups of customers, which have similar needs and demand similar products and/or services concerning the recognized qualities of these products, e.g. functionality, price, design, etc. The term segmentation is also used when customers with identical product and/or service needs are divided up into groups so they can be charged different amounts for the services. A customer is allocated to one market segment by the customers individual characteristics. Often cluster analysis and other statistical methods are used to figure out those characteristics, which lead to internally homogeneous and externally heterogeneous market segments. Examples of characteristics used for segmentation: Gender Price Interests Location Religion Income Size of Household Age Education Occupation Social Class Ethnicity Nationality Basis for segmenting consumer markets

Geographic segmentation Demographic Segmentation Psychographic Segmentation Behavioral Segmentation Occasions Benefits

Demographic Segmentation
Demographic segmentation consists of dividing the market into groups based on variables such as age, gender, family size, income, occupation, education, religion, race and nationality. As you might expect, demographic segmentation variables are amongst the most popular bases for segmenting customer groups. This is partly because customer wants are closely linked to variables such as income and age. Also, for practical reasons, there is often much more data available to help with the demographic segmentation process.

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