Explain Bases of Segmentation / Segmentation variables for consumer markets.

Each market offers a unique opportunity for marketers to form segments. As all the customers show different buying behaviour, marketers group the customers in segments to target them via marketing functions. The basic idea is not to serve the entire market but identify a segment that the organisation can best cater to. The marketers identify certain criteria to group customers together. There is not a single way of segmenting the market so the marketers study different variables. Following are the bases/ variables that are mostly followed for market segmentation. An individual in a segment will mostly exhibit the same behaviour as compared to any other individual or individuals in the same segment.

1) Geographic segmentation – the market classification is done basis the geographical area. People in different geographical regions display different characteristics. The division is done basis continents, nations, states, regions, districts. The company needs to cater to the needs as per the preferences of consumers in that region. For example, a coffee maker can advertise throughout the year in cold regions. Similarly, fast food chains like McDonald’s had to introduce vegetarian offerings with local flavours (non-beef, spices, etc.) in countries like India. The marketers also study the population density in the towns and villages to understand and forecast the sales.

2) Demographic segmentation – the groups are formed based on demographic variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, and nationality. These variables are easy to measure and are most popular in segmenting the market. Many times, the marketer needs to study the demographic variables to understand the density of population based on income group, occupation, etc. when studying psycho-graphic variables like lifestyle, personality, etc. These variables form the basis for other psycho-graphic variables as well. Let us see some of the demographic variables considered for segmenting the markets.

Age and life-Cycle- a teenager will exhibit a different buying behaviour than a man who has a dependent child in the family. Similarly, a region which has high density of old age population will need products for their requirement available at a reasonable price. For example, population with highest population of children will be a good market for toys, school bags, baby foods, etc. Magazines, bikes, sports accessories, will appeal to population in the age group of 15 years and above.
Gender – products made for male are different for those made for females. Both of them have different preferences. Cosmetics, footwear, makeup kits, cars will have a different demand basis the gender preferences in the target market.

Income- brands like Omega, Rado, and Jaguar will not venture in markets which has low income population. International brands like Nike, Adidas target segments with middle and high income group, while brands like Bata, Liberty target lower income and mid income group population.
Religion – the religious belief also affect the product purchase. A region with majority of Muslim population will not have food products with pork ingredients and similarly beef products will not be in demand in markets with majority Hindu population.

3) Psychographic segmentation – in this segmentation the market is divided basis the life-style personality characteristics. Consumers within a demographic group tend to behave differently depending on their lifestyle and personality.

The products that people buy also reflects their life-style. Teenagers in a certain region may prefer western lifestyle and similarly, teenagers in a different region may exhibit the local lifestyle. Companies often target buyers based on life-style for products like cars, cigarettes, deodorants, shoes, mobiles, yoga classes, club memberships, etc.

Marketers often give their brand a personality that corresponds to the personality of the target market. For example, BOSCH is associated with ruggedness and reliability, Nike with exciting, Blackberry with Executives, etc. Products are often launched with sports and film personalities promoting them.
The psychographic variables are often difficult to determine. In order to understand these characteristics, marketers carry out surveys which can be costly, time consuming, and may require experts in interpreting the data.

4) Behavioural Segmentation – the consumer’s knowledge, attitude, belief and response to a product are considered for behavioural segmentation. The consumers buy certain products because of brand loyalty, additional benefits offered, attitude towards the brand, occasion, usage status, use pattern, etc. We will look at some of these in brief.

Use pattern divides consumers as heavy users, medium users, light users and non-users. Basis the information on this, marketers design appropriate marketing mix to influence sales. This data is also aligned with other variables like demography, etc. to get detailed information.
Brand loyalty segmentation is done to ensure customers are retained and they don’t switch to competitor products. In a market, consumers can be hard-core loyalist, somewhat loyalist, or not loyalist at all. This characteristic is difficult to measure as consumers switch brands in different markets based on price, etc.

Occasion segmentation helps in distinguishing buyers based on the occasion they buy products. For example, products bought regularly or on special occasions – when they develop a need and purchase the product. Many marketers target customers during festivals, vacations days like Valentine ’s Day, Mother’s day, etc. For example, Most of the consumers in many regions of India buy new vehicles ahead of Diwali festival.

Benefits sought by buyers helps in segmenting. Customers differ in the benefits sought. For example, buyers may consider style, life of product, features, economy, performance, etc. differently. For example, a teenager would expect seamless use of internet sites on his mobile while a working class person who travels a lot would expect a basic phone with long lasting battery life. Similarly teenagers would prefer looks when buying a motorbike, and the priority of a lower middle class person who commutes to work on his motorbike will be fuel efficiency.

As the above segmentation variables change overtime, it is necessary to research and analyses the target market regularly. A persons personality gets modified, belief changes, demographics change, etc. which result in change of customer’s needs and preferences.