>> May 7, 2010
Market segmentation is a technique in which companies divide their large market into small parts. This small division is very helpful to reach the specific consumer and providing his best product according to his need. There are large number of buyers in the market and market has been made big. So, it is very necessary to segment or divide into small parts according to the needs, wants, location of consumers.
Major basis or Ways or Approaches for segmenting consumer and business market
[ A] Segmenting Consumer Market
1. Geographic Segmentation
If a company divides his business market according to the geographical location, then it will be geographic segmentation. Segmentation is done on the basis of nations, regions, states countries, cities and villages.
2. Demographic Segmentation
In this segmentation, company divide the market into small parts on the basis of age, gender, family size and income.
For example, we can divide market according to age of consumers
We can develop products for young - Segment A
We can also develop products for old - Segment B
In this division company divides market according to male and female need. This division can be seen in clothing business.
4. Income Segmentation
This segmentation can be used for selling financial products and automobile industry.
Suppose a company makes cars. Then its price will be divided according to the income of consumers
a) Car for high income class
b) Car for middle income class
5. Psychological Segmentation
This division is done according to life style and personality of consumer. You can see different makeup and fashion products in the market which are affected with the psychology of consumers.
6. Behavioral Segmentation
This division is done according to a) knowledge of consumers b) attitude of consumers c) response of consumers
i) products for first time users
ii) products for regular users
[B] Segmenting the Business Market
Business market can not divide only above basis but we can divide it on the basis of Zip codes, level of population and IP address of computer also.
[C] Segmenting of International Market
For segmenting our international market, we have to study international economy and political environment of each country. After this, we can make and fix the target to sell specific product for specific country according to the need of consumer of that country. It is not necessary that same product will be sold in two or more country. Company should watch cultural factors of different country also.