Bases of Market Segmentation

It is widely thought in marketing that than segmentation is an art, not a science. The key task is to find the variable, or variables that split the market into actionable segments.

There are two types of segmentation variables:
(1) Needs
(2) Profilers

The basic criteria for segmenting a market are customer needs. To find the needs of customers in a market, it is necessary to undertake market research.

Profilers are the descriptive, measurable customer characteristics (such as location, age, nationality, gender, income) that can be used to inform a segmentation exercise.

The most common profilers used in customer segmentation include the following:
Profiler Examples
Geographic

• Region of the country
• Urban or rural

Demographic

• Age, sex, family size
• Income, occupation, education
• Religion, race, nationality

Psychographic

• Social class
• Lifestyle type
• Personality type

Behavioural

• Product usage - e.g. light, medium ,heavy users
• Brand loyalty: none, medium, high
• Type of user (e.g. with meals, special occasions)