Market Segmentation

What is market segmentation?

Markets can be divided into different sections or market

segments. Each segment is made up of consumers that
have similar needs. Businesses recognise this and target
particular market segments with their products.

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 1.
Location (Geographical)
segmentation
Di erent customer groups are likely to
have di erent needs depending on
where they live. E.g. those who live in
hot climates have di erent needs
from those who live in cooler climates.

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 2.
Demographic segmentation
it is common for businesses to divide markets according to
the age, gender, income, social classes, ethnic origin or
religion or population
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 Demographic segmentation

Age Gender Income

Infants, teenagers, young Businesses are likely to In most countries
adults and the over-65s target male and female incomes vary
have different needs consumers with different considerably. As a result,
because of their age. products. businesses target
products at certain
income groups.

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 Demographic segmentation

Social class Ethnic origin Religion

Businesses pay a lot of Many countries are Different religious
attention to different made up of different groups have different
socio-economic ethnic groups. This is needs. E.g food, clothes
groups (division of important for businesses
people according to because they have
social class based on different needs owing to
employment status/ their different cultures..
occupation).

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 3.
Lifestyle (psychographic)
segmentation
Using geographic and
demographic may have
limitations. However, their
spending patterns could be
quite different. therefore , an
alternative way of grouping
customers is through lifestyles.

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 Benefits of market segmentation

1- Businesses that produce different 2- customers may be more loyal to a 3- Businesses can market a wider
products for different market business that provides products that range of goods to different
segments can increase revenue. are designed specifically to them. customer groups.

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