Studybay uses cookies to ensure that we give you the best experience on our website. By continuing to use Studybay you accept our use of cookies view more on our Cookie Policy

Consumer Structured Market Segmentation

The procedure for dividing the market into different communities is called the market segmentation. This division is performed to group in the similar customers predicated on their specific needs and requirements of the products/services.

Market segmentation is one of the steps that get into defining and targeting specific markets. It's the process of dividing market into a distinct group of clients that want different products or marketing mixes. A key factor to success in today's market place is finding delicate differences to provide an enterprise the marketing advantage. Businesses that focus on specialty marketplaces will promote its products and services more effectively than a business aiming at the "average" customer. Opportunities in marketing increase when segmented sets of clients and customers with varying needs and desires are accepted.

Characteristics of Marketing Segmentation

A good market segmentation will bring about segment users that are internally homogenous and externally heterogeneous; that is, as similar as you can within the portion, so that different as you can between segments. Market segment must have the following characteristics:

Identifiable: the differentiating attributes of the sections must be measurable in order to be diagnosed.

Accessible: the segments must be reachable through communication and syndication channels.

Substantial: the sections should be sufficiently large to justify the resources necessary to focus on them.

Unique needs: to justify separate offerings, the sections must respond differently to the various marketing mixes.

Durable: the sections should be relatively steady to minimize the price tag on frequent changes.

There are two types of Business Consumer Based mostly and Industrial Founded. Market segmentation for both of these varies. We will take a peek on both of these.

Consumer Established Market Segmentation

A basis for segmentation is a factor that varies among organizations within a market, but that is consistent within groups. One can identify four principal bases on which to portion a consumer market:

Geographic segmentation: is dependant on regional variables such as region, weather, inhabitants density, and society development rate.

Demographic segmentation: is based on parameters such as years, gender, ethnicity, education, occupation, income, and family position.

Psychographic segmentation: is dependant on parameters such as worth, behaviour, and lifestyle.

Behavioural segmentation: is based on variables such as utilization rate and patterns, price sensitivity, brand commitment, and benefits sought.

The best bases which to segment the marketplace depend on this situation and are determined by marketing research, market styles, and managerial judgment. Let us discuss these details in details.

Geographic Segmentation

This kind of segmentation is mainly used by multi-national firms or transnational businesses. Such organizations operating across the boundaries modify their marketing mix based on the various requirements of consumers with in each geographic portion they operate in. As today the planet has turned into a global village so this kind of market segmentation is now more important. The following are a few examples of geographic factors often used in segmentation:

Region: by continent, country, talk about, or even area. This kind of segmentation involves division of customer base by continent, country or talk about etc. If you are a organization focusing on a global range you may split by global areas such as Europe, North America, SOUTH USA, Asia and Africa. McDonalds globally, sell burgers targeted at local markets, for example, burgers are produced from lamb in India rather than beef because of religious issues. In Mexico more chili sauce is added and so forth.

Size of metropolitan area: segmented matching to size of people. for example, in London UK certain parts of the Western End of London are definitely more affluent then the East End and you'll find particular products sold in these regions predicated on their affluence.

Population density: often classified as metropolitan, suburban, or rural.

Climate: matching to weather patterns common to certain geographic locations.

Demographic Segmentation

Demographic segmentation consists of dividing the market into groups predicated on parameters such as time, gender family size, income, profession, education, religion, contest and nationality. As you might expect, demographic segmentation factors are amongst the most popular bases for segmenting customer categories.

This is partly because customer wants are closely associated with factors such as income and years. Also, for sensible reasons, there is often a lot more data available to benefit the demographic segmentation process. The primary demographic segmentation variables are summarized below:

Age: Consumer needs and desires change with get older although they may still wish to consumer the same types of product. So Marketers design, offer and promote products diversely to meet up with the needs of different age groups. Good examples include the marketing of toothpaste (comparison the branding of toothpaste for children and adults) and gadgets (with many age-based sections).

Life-cycle level: A consumer stage in the life-cycle is an important adjustable - specifically in markets such as leisure and tourism. For instance, contrast the merchandise and promotional way of Membership 18-30 holiday seasons with the just a bit more enhanced and sedate approach followed by Saga Getaways.

Family size: Responding to the needs of the client based on their family. For instance selling the several size of breakfast time cereals.

Occupation: Targeting the client predicated on their profession. It really is good for the educators and stunt individuals to buy the life insurance for their profession.

Gender: Gender segmentation is trusted in consumer marketing. The best for example clothing, hairdressing, mags and toiletries and cosmetic makeup products.

Income: Another popular basis for segmentation. Many companies focus on affluent consumers with luxury goods and convenience services. Cases include Coutts loan provider; Moet & Chandon champagne and Elegant Resorts - an up-market travel company. In comparison, many companies focus on marketing products that appeal directly to consumers with relatively low incomes. For example Aldi (a discount food store), Air tours vacations, and discount clothing sellers such as TK Maxx.

Social school: Many Marketers think that a consumers "recognized" social course influences their personal preferences for autos, clothes, furniture, leisure activities and other products & services. There is a clear website link here with income-based segmentation.

Lifestyle: Marketers are increasingly interested in the result of consumer "lifestyles" on demand. Regrettably, there are various lifestyle categorization systems, many of them designed by advertising and marketing agencies as a means of earning new marketing clients and promotions!

Ethnicity: Producing the merchandise for the customers based on the ethnic prices. For instance we can easily see the cultural food section in every the major stores like TESCO and Sainsbury's etc.

Religion: Handling the needs of the client predicated on their religion principles. For example providing the halal meats for the Muslims and providing the veggie products for the Hindus based on their different faith values.

Psychographic Segmentation

Psychographic segmentation teams customers according to their lifestyle. Activities, hobbies, and thoughts (AIO) surveys are one tool for calculating lifestyle and AIO's dictate our daily tendencies from where we shop from what we buy. Some psychographic variables include:

Lifestyle categories: and develop lifestyle information on their target market. If we understand the approach to life of a specific group we can sell them product/services on the foundation that it will enhance their lifestyle. A lifestyle group is a specific segment defined by the business that is marketing something or service. This lifestyle portion is tagged because specific within it screen similar characteristics. For example in the first 1980s within the united kingdom as the economy was booming the City of London were more and more employing young self-employed staff on high salaries. The marketing termed this group as YUPPIES; they were young upwardly mobile pros, associated with mobile phones, money, expensive automobiles, and prestigious city careers. Third agers are another group termed and determined by the marketing industry. They are people in their 50's retired from an occupation, and have a higher disposable income as time passes on the side. Many of these third-agers are adventurous and experimenters, as they have got spent their previous lives working hard plus they seek enjoyment off their remaining years and also have the income to invest on luxury items. In america there are 70 million third-agers who are the most effective growing users of the internet, spending more time on the internet then their young counterpart.

Personality Characteristics: Products and brands can also be targeted at particular personalities. Pigaio motorcycles are aimed at young 18-25 outgoing, independent individuals. Often marketers try to develop personalities because of their brands and products that mimic that of their target market.

Social School Segmentation: Divides modern culture into 6 unique groups based entirely on job. (a) Professional staff (b) Midsection management (C1) Junior management (C2) Skilled manual (D) Semi-skilled and unskilled workers (E) Those dependent on the state. Social school segmentation works on the assumption that the higher your profession the greater you will earn. Thus the more affluent lifestyle you will lead. Marketers utilize this type of information to market products and services predicated on lifestyle behavior, as well as your profession does have an impact on the way you behave.

Behavioral Segmentation

Refers to why people purchase a service or product. Behavioral segmentation has the benefit of using parameters that are directly related to the product itself. It really is a fairly direct starting point for market segmentation.

Benefit sought: Behavioral segmentation can be broken down into the gain a consumer seeks from investing in a product. How will the merchandise improve their overall lifestyle? When investing in a computer the benefit desired maybe of 'decrease of use' to the 'need for acceleration'.

Occasion: is another adjustable. When should a product be purchased? The demand for turkeys boosts during Christmas, bouquets and chocolates on mother's day and so forth. Occasion segmentation is designed to increase the 'reason to buy factor' and therefore increase sales.

Usage rate: divides customers into light, medium and heavy users. Heavy users naturally add more to turnover then light or medium users, the objective of an organization ought to be to draw in heavy users who'll make a larger contribution to company sales.

Brand commitment: customers never want to provide their brand loyalty and this is one of the biggest advantages for the organization to earn much more benefits. For example the cigarette smoker who smokes Benson and Hedges won't switch to Yellow metal Leaf.

User status: it also results the advertising of product/service. A customer can be a potential, first-time or regular buyer. If a customer is purchasing something for the very first time he/she will be reluctant a lttle bit because he/she has not a concept of quality of the product/service.

Industrial Market Segmentation

In distinction to consumers, professional customers tend to be fewer in quantity and purchase greater quantities. They evaluate offerings in greater detail, and the decision process usually includes more than one person. These characteristics apply to organizations such as manufacturers and service providers, as well as resellers, government authorities, and institutions.

While many of the consumer market segmentation bases can be applied to businesses and organizations, the different character of business market segments often brings about segmentation on the next bases:

Geographic segmentation: predicated on regional factors such as customer amount, regional industrial expansion rate, and international macroeconomic factors.

Customer type: predicated on factors including the size of the business, its industry, position in the value string, etc.

Buyer behaviour: based on factors such as devotion to suppliers, utilization patterns, and order size.

Geographic segmentation

In industrial markets, customer location may make a difference in some instances. Shipping and delivery costs may be a purchase factor for seller selection for products having a high mass to value ratio, so distance from the vendor may be critical. In a few industries firms tend to cluster alongside one another geographically and therefore may have similar needs within a region.

Customer type

Business customers can be grouped according to type as follows:

Company size


Decision making unit

Purchase Criteria

Buyer behaviour

In industrial markets, patterns of purchase behaviour can be considered a basis for segmentation. Such behavioural characteristics may include:

Usage rate

Buying position: potential, first-time, regular, etc

Purchase technique: sealed bids, negotiations, etc

Why Market Segmentation Matters

The marketing theory demands understanding customers and gratifying their needs better than the competition. But different customers have different needs, and it seldom is possible to fulfill all customers by treating them similarly.

Mass marketing refers to treatment of the market as a homogenous group and offering the same marketing mixture to all customers. Mass marketing allows economies of size to be came to the realization through mass creation, mass distribution, and mass communication. The disadvantage of mass marketing is that customer needs and preferences vary and the same offering is improbable to be viewed as best by all customers. If firms dismissed the differing customer needs, another firm likely would enter into the marketplace with something that serves a specific group, and the incumbent businesses would lose those customers.

Target marketing on the other hands recognizes the diversity of customers and does not try to please these with the same offering. The first step in goal marketing is to recognize different market segments and their needs.

Role of Market Research

Research, as a general concept, is the process of gathering information to learn about something that is not fully known. Everybody engages in some type of research. From your highly trained geologist investigating recently uncovered earthquake faults, to the author of best selling spy novels getting perception into new security techniques, to the model coach hobbyist expending hours hunting down the maker of an old electric engine motor, each is motivated by the search for information.

For marketers, research isn't just used for the purpose of learning, additionally it is a critical component had a need to make good decisions. General market trends does this giving marketers a picture of what is occurring (or likely to happen) and, when done well, offers substitute choices that can be made. For example, good research may suggest multiple options for producing new products or joining new markets. In most cases marketing decisions show less risky (though they should never be without risk) when the marketer can pick from several option.

Using an analogy of a house foundation, marketing research can be viewed as the foundation of marketing. Just like a well-built house takes a strong foundation to remain sturdy, marketing decisions need the support of research to become seen favorably by customers also to endure competition and other external pressures. Consequently, every area of marketing and everything marketing decisions should be recognized with some degree of research.

While research is paramount to marketing decision making, it generally does not always have to be elaborate to be effective. Sometimes small efforts, such as doing a quick make an online search, will provide the needed information. However, for some marketers periodically more complex research work is needed and understanding the right way to perform research, whether doing the work themselves or employing someone else to take care of it, can increase the effectiveness of the projects.

As noted, marketing research is undertaken to support a multitude of marketing decisions. The stand below presents a tiny sampling of the research performed by marketing decision area.

Marketing Decision

Types of Research

Target Markets

sales, market size; demand for product, customer characteristics, purchase habit, client satisfaction, website traffic


product development; package deal protection, packaging awareness; brand name selection; brand acknowledgement, brand desire, product positioning


distributor interest; assessing transport options; online shopping, retail store site selection


advertising recall; advertising copy testing, sales advertising response rates, sales force compensation, traffic studies (outdoor advertising), pr media placement


price elasticity research, optimal price setting, discount options

External Factors

competitive examination, legal environment; cultural and social trends


company image, test marketing

Market research contains an idea that charts how relevant data is usually to be collected and examined so the email address details are useful and relevant for making marketing decisions. Once the research and the related examination are complete, the results are communicated to management. This provides management with in-depth information regarding vital factors which have a direct effect on the target market and existing marketing mix. Market research allows management to help make the changes essential for greater results through implementing a proactive way.

Marketing research is a process that investigates both organizations and folks. Certainly, organizations are made up of folks so as it pertains right down to it, marketing research is a branch of the interpersonal sciences. Social knowledge studies people and their human relationships and includes such areas as economics, sociology and mindset. To get understanding into their fields, researchers in the communal sciences use technological methods which have been tested and processed over more than 100 years. Several methods require the organization of tight handles on studies. For example, many companies survey (i. e. , ask questions) a little percentage with their customers (called a sample) to observe how satisfied these are with the company's efforts. For the info obtained from a tiny group of customers to be useful when analyzing how all customers feel, certain controls must maintain place including adjustments on who should be contained in the sample.

Primary Research

When marketers execute research to collect original data for his or her own needs it is named primary research. This process has the internet marketer or someone working for the marketer developing and then conducting a research plan. Even as noted earlier, most important research is often undertaken after the researcher has gained some perception into the issue by collecting secondary data.

While not as commonly used as secondary research, primary research still represents a significant part of overall marketing research. For most organizations, especially large consumer products companies, spending on principal research far surpasses spending on extra research.

The key research market includes marketers carrying out their own research and an intensive band of companies offering their services to marketers. These companies include:

Full-Service GENERAL MARKET TRENDS Firms - These companies develop and carryout the full research plan for their clients.

Partial-Service Market Research Firms - These companies offer knowledge that address a specific part of the research plan, such as producing methods to accumulate data (e. g. , design studies), finding research members or undertaking data examination.

Research Tools Suppliers - These firms provide tools utilized by researchers and include data collection tools (e. g. , internet surveys), data analysis software and report presentation products.

Primary research is gathered in a research "instrument" designed to track record information for later analysis. Marketing research workers use various kinds of instruments from basic methods that record participant replies to highly advanced electric way of measuring where research individuals are connected to advanced equipment.


Following are the major features of the Primary Research:

Addresses Specific Research Issues - Undertaking their own research allows the marketing organization to address issues specific with their own situation. Key research was created to collect the info the marketer needs to know and record it in ways that profit the marketer. For instance, while information reported with secondary research might not exactly fit the marketer's needs (e. g. , different age groupings) no such problem is accessible with principal research since the marketer controls the study design.

Greater Control - Not only does main research allow the marketer to concentrate on specific issues, it also allows the marketer to have a higher-level of control over how the information is gathered. In this manner the professional can choose such issues as size of task (e. g. , just how many responses), location of research (e. g. , geographic area) and timeframe for concluding the project.

Efficient Spending for Information - Unlike secondary research where the marketer may invest information that's not needed, primary data choices' focus on issues specific to the researcher increases the probabilities that research funds will be put in efficiently.

Proprietary Information - Information gathered by the internet entrepreneur using major research is their own and is normally not shared with others. Thus, information can be maintained hidden from competitors and probably offer an "information advantage" to the business that undertook the principal research.


Following are the major down sides of the Primary Research:

Cost - Compared to secondary research, primary data is quite expensive since there is a lot of marketer participation and the trouble in getting ready and undertaking research can be high.

Time Consuming - To be achieved correctly principal data collection requires the development and execution of a study plan. Heading from the start-point of deciding to undertake a research task to the end-point to presenting results is often a lot longer than enough time it takes to obtain secondary data.

Not Always Possible - Some studies, while potentially offering information that could demonstrate quite valuable, are not within the reach of a marketer. Many are just too large to be carried out by all but the largest companies plus some are not possible at all. For example, it would not be practical for McDonalds to attempt to interview every customer who trips their stores on a certain day since doing this would require selecting a huge number of analysts, an unrealistic price. Fortunately, as we will see in a later tutorial there are ways for McDonalds to use other methods (e. g. , sampling) to meet their needs without the need to talk to all customers.

Secondary Research

By way the most widely used way for collecting data is through extra data collection, commonly called secondary research. This process will involve collecting data from either the originator or a distributor of principal research (see Major Research talk below). Quite simply, being able to access information already compiled.

In most instances this means finding information from third-party resources such as marketing research accounts, company websites, publication articles, and other options. But in actuality any information recently compiled, whether from sources external to the internet marketer or from interior options, such as accessing material from previous market research carried out by the marketer's firm, old sales reviews, accounting records and many others, falls under the heading of secondary research.


Following will be the major advantages of the Extra Research:

Ease of Access - In years past accessing good supplementary data required marketers to go to libraries or wait until a report was delivered by email. When online gain access to initially became an option marketers needed training to learn different rules and procedures for every databases. However, the web has altered how secondary research is utilized by offering convenience (e. g. , online access from many locations) and generally standardized utilization methods for all data resources.

Low Cost to obtain - Researchers are often attracted to supplementary data because getting these details is much less expensive than if the research workers had to carry out the research themselves.

May Help Clarify Research Question - Secondary research is often used prior to much larger scale principal research to help clarify what is to be discovered. For instance, a researcher doing competition analysis, but who's unfamiliar with competitors in market, could access secondary sources to discover a list of potential challengers.

May Answer Research Question - As noted, supplementary data collection is often used to help set the level for key research. In the course of doing so researchers could find that the exact information these were looking for is available via secondary resources thus eliminating the need and price to undertaking their own principal research.

May Show Complications in Conducting Primary Research - The originators of secondary research often provide details about how the info was collected? This might include dialogue of difficulties encountered. For instance, the supplementary research may be considered a research report compiled by a large market research company. These kinds of reports often add a section speaking about the procedures used to collect the data and within this might disclose problems in acquiring the data, like a high percentage of individuals declining to be a part of the research. After reading this the marketer may decide the actual information which may be obtained is not worth the potential issues in conducting the research.


Following will be the major drawbacks of the Extra Research:

Quality of Researcher - Once we will discuss, research conducted using most important methods are basically handled by the marketing consultancy. However, this isn't the case as it pertains to data gathered by others. Consequently, the quality of supplementary research should be scrutinized strongly since the roots of the information may be questionable. Organizations counting on secondary data as an important aspect in their decision-making (e. g. , market research studies) must take extra steps to judge the validity and dependability of the information by critically assessing how the information was accumulated, analyzed and provided.

Not Specific to Researcher's Needs - Secondary data is often not offered in an application that exactly matches the marketer's needs. For example, a professional obtains a pricey research record that talks about how different age groups feel about certain products within the marketer's industry. Sadly, the internet entrepreneur may be disappointed to learn that what sort of research divides age ranges (e. g. , under 13, 14-18, 19-25, etc. ) does not match the way the marketer's company designates its age groups (e. g. , under 16, 17-21, 22-30, etc). As a result of this difference the results may not be useful.

Inefficient Spending for Information - Since the research received might not exactly be specific to the marketer's needs, an argument can be produced that research spending is inefficient. That is, the marketer might not exactly receive a adequate amount of information for what is spent.

Incomplete Information - Many times a researcher discovers that research that looks promising is in fact a "teaser" released by the research provider. This often occurs when a little portion of a report is disclosed, often for free, but the full report, which is often expensive, is needed to gain the full value of the study.

Not Well-timed - Extreme care must be exercised in counting on supplementary data that may have been collected well in the past. Out-of-date information may offer little value specifically for companies rivalling in fast changing markets.

Not Proprietary Information - Generally extra research is not carried out specifically for one company. Instead it is manufactured available to many either for free or for a rate. Consequently, there is certainly rarely an "information advantages" gained by those who have the research.

  • More than 7,000 students prefer us to work on their projects
  • 90% of customers trust us with more than 5 assignments
submit a project

Latest posts

Read more informative topics on our blog
The Educational Curriculum INSIDE THE Philippines Education Essay
Education The educational curriculum in the Philippines is low in comparison to other countries. Other countries are able to find out more advanced...
The Ecotourism In Scotland Travel and leisure Essay
Tourism Hospitality and travel and leisure are very closely linked; every time a tourist comes to Scotland there are lots of restaurant and hotels to...
Corporate Social Responsibility: Targets and Concepts
Business Abstract Corporate Social Responsibility is a management principle whereby companies integrate social and environmental concerns in their...
A Personal Reflection AROUND THE ITM Information Technology Essay
Information Technology I have been in information technology industry for a long time. I have first-hand information technology experience especially in...
The Theory Of Mcdonaldization Commerce Essay
Commerce McDonaldization is the process where the concepts of the junk food industry have come to dominate an increasing variety of organizations in...
The Interpretation Of Life Quotes
Philosophy As you all know most of us are here in this planet for a while only and our life or being blessed as a individuals is a gift irrespective of...
The Sex Appeal In Advertising Mass media Essay
Media Through the years we have found a diversity advertising resources for offering products which were calling the attention of the costumers, to be...
Impacts of Tourism Deregulation and National Security
Marketing National security is definitely an issue going out with back to as early as when man started out arranging himself in contemporary society....
Homogeneous And Differentiated Product In Microeconomics Economics Essay
Economics The economic issue in this observation involves the concept of homogeneous and differentiated product in microeconomics According to Lindeman...
Check the price
for your project
we accept
Money back
100% quality
Plagiarism free writing service