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The division of a market into different homogeneous groups of consumers is known as market segmentation. Rather than offer the same marketing mix to vastly different customers, market segmentation makes it possible for firms to tailor the marketing mix for specific market, thus better satisfying customer needs. A market segment should be:
- measurable
- accessibly by communication and distribution channels
- different in its response to a marketing mix
- durable
- substantial enough to be profitable
The four primary bases on which markets are segmented are:
- geographic – this is based on regional variables such as region, climate, population density, and population growth rate
- demographic – is based on variables such as age, gender, ethnicity, education, occupation, income and family status
- psychographic – based on variables such as values, attitudes, and lifestyle
- behavioral – based on variables such as usage rate and patterns, price sensitivity, brand loyalty and benefits sought
When the market has been segmented the firm now has to choose its target market...
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