Market Segmentation

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

3.Gender Segmentation

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

For example

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.