The most common methods of market segmentation

Initially it was produced only in black. The business historian, Richard S. Tedlowidentifies four stages in the evolution of market segmentation: The economy was characterised by small regional suppliers who sold goods on a local or regional basis Unification or mass marketing s—s:

The most common methods of market segmentation

Young single, young married no children, young married youngest child under six, young married youngest child over six, older married with children, older married no children under eighteen, older single, etc.

Under this method consumers are classified into market segments on the basis of their psychological make-up, i. According to attitude towards life, people may be classified as traditionalists, achievers, etc.

Rogers has identified five groups of consumer personalities according to the way they adopt new products: These are cosmopolitan people who are eager to try new ideas.

They are highly venturesome and willing to assume the risk of an occasional bad experience with a new product. These are influential people with whom the average person checks out an innovation.

This group tends to deliberate before adopting a new product.

How to Segment a Market: 3 Steps (with Pictures) - wikiHow

Its members are important in legitimising an innovation but they are seldom leaders. This group is cautious and adopts new ideas after an innovation has received public confidence.

These are past-oriented people. They are suspicious of change and innovations. By the time they adopt a product, it may already have been replaced by a new one. Understanding of psychographic of consumers enables marketers to better select potential markets and match the product image with the type of consumer using it.

For example, women making heavy use of bank credit cards are said to lead an active lifestyle and are concerned with their appearance. They tend to be liberated and are willing to try new things. Psychographic classification may, however, be an oversimplification of consumer personalities and purchase behaviour.

So many factors influence consumers that an early adopter of one product might well be a laggard for some other product and vice versa. In this method consumers are classified into market segments not the basis of their knowledge, attitude and use of actual products or product attributes.

Any of the following variables might be used for this purpose: Buyers may be differentiated on the basis of when they use a product or service.

For example, air travellers might fly for business or vacation. Therefore, one airline might promote itself as a business flyer while another might target the tourists. The major benefit sought in a product is used as the basis of classify consumers.

High quality, low price, good taste, speed, sex appeal are examples of benefits. For example, some air travellers prefer economy class low pricewhile others seek executive class status and comfort.

Purpose of Market Segmentation | StartRunGrow - your one-stop site for everything business

Potential buyers may be classified as regular users, occasional users and non-users. Marketers can develop new products or new uses of old products by targeting one or another of these groups.

The most common methods of market segmentation

Consumers are classified light, medium and heavy users of a product. In some cases, 80 per cent of the product may be sold to only 20 per cent of the group.

Marketers can decide product features and advertising strategies by finding common characteristics among heavy users. Generally, marketers are interested in the heavy user group. But marketers should pay attention to all the user groups because they represent different opportunities.

The non-users may consist of two types of people— those who do not use the product and those who might use it.

Some may change over time from a non-user to a user. Those who do not use due to ignorance may be provided extensive information.

Repetitive advertising may be used to overcome inertia or psychological resistance. In this way non-users can gradually be converted into users. Here the buyers are asked to compare the existing brands according to their perceived similarity and in relation to their ideal brands.

First, the analyst infers the latent attributes that consumers are using to perceive the brand. Then buyers are classified into groups each having a distinct ideal brand in mind.The four bases for segmenting consumer market are as follows: A.

Demographic Segmentation B. Geographic Segmentation C. Psychographic Segmentation D. Behavioural Segmentation. It is one of the most common demographic variables used to segment markets. Some com­panies offer different products, or use different marketing approaches for.

Customer Segmentation – A Technique for Effective Marketing. Customer segmentation is also known as market segmentation. It is the practical division of potential customers in a given market .

RFM analysis is based on a simple technique. RFM (Recency, Frequency, Monetary) analysis is a proven marketing model for behavior based customer groups customers based on their transaction history – how recently, how often and how much did they buy. Demographic segmentation is the most common segmentation strategy because these segments are _____.

Bases of Market Segmentation

Easy to define ______ segmentation uses a combination of geographic, demographic, and lifestyle characteristics to classify consumers. The marketing strategy section of your business plan is where your hard market research work will pay off.

May 24,  · Reader Approved How to Segment a Market. The best way to go out of business is to attempt to be all things to all people. Not everyone can or will be your customer, but on a planet of more than 6 billion people, there should still be enough market for you to survive in, if not thrive.

RFM Analysis For Successful Customer Segmentation - Putler