Explain Bases of Market segmentation

Explain Bases of Market segmentation.

Ans.    There are several ways or methods to segment a market. Such ways or methods depends upon consumer characteristics and their responses to the products or services.

A paradigm shift has taken place in the way the Indian corporate (is) viewing customers. There has been a shift from organizing by-products to organizing by-market segments. For example, Maruti is segmenting is customers on the basis of economic and premium class, which was not done previously.


In geographic segmentation, the market is sub divided on the basis of area.

—       Region : Regional segmentation is made because regional differences exist in respect of demand for products. For example, buyers from south India are different from the buyers in north.

—       Urban / Rural : There are differences in buying behaviour of urban and rural customers. Accordingly, marketing strategies must be designed depending upon their likes, dislikes, moods, preferences, fashions and buying habits.

—       Locality : Consumer’s buying behaviour is also reflected by the locality within a particular city. For instance, there are differences in terms of buying patterns of people residing at Parel and Parle, within a city like Mumbai.



Demography refers to study4about the different aspects of population. Markets can be divided on demographic factors like age, gender, education etc. The various demographic factors are :

—       Age : The primary method of analysing markets by age is to divide the total population into age groups and analyse the wants and needs of each group.

—       Gender : Marketers devote much attention to male and female differences in purchasing. Today, marketers segment female groups into college girls, working women, housewives, etc. Again, male groups can be further classified.

—       Income : Buying patterns depends on income of the consumers. No two individuals or families spend money in exactly the same way. If a researcher knows a person’s income, he can predict with some accuracy wants and needs of that person and how those wants are likely to be satisfied.

—       Education : Market can be segmented on the basis of education – matriculation or less, under graduates, graduates, post-graduation, etc. Most studies show that the highly educated people spend more than the poorly educated in respect of housing, clothing, recreation, etc.

—       Family Size : The consumption patterns of certain products definitely vary with the number of people in the household. Manufacturers of certain products such as ice-cream market family packs.

—       Family Life Cycle : The market can be segmented as bachelors, newly married couples, married with grown up children, older married couples, etc. For selling tours and vacations, Life Insurance policies etc., this segmentation is of use.

—       Race and Religion : Consumption patterns of certain products differ on the basis of religion and race, such as alcohol and meat products.


The market can be segmented on the basis of sociological factors such as :

—       Cultural Influences : The marketer must consider cultural influences while segmenting markets. People in urban areas are influenced to a certain extent by western culture, whereas, many people in villages follow more or less traditional culture. Culture is influenced by our socio-cultural institutions like family, religion, language, education, and so on.

—       Influence of Social Class : Buying behaviour is reflected by the influence of social class to which the consumers belong. The social class can be segmented as – lower -lower, middle-lower, upper-lower, lower-middle, middle-middle, upper-middle, lower-upper, middle-upper and upper-upper. Firms dealing in clothing, home furnishing, automobiles, etc. can design products for specific social class.

—       Influence of Reference Groups : A reference group may be defined as a group of people who influence a person’s attitudes, values and behaviour. Consumer behaviour is influenced by the small groups to which they belong or aspire to belong. These groups include family, religious groups, a circle of close friends or neighbours, etc. Each group develops its own set of attitudes and beliefs that serve as guidelines for members’ behaviour


It refers to individual aspects like life style and personality.

—       Life-Style : Sellers study the life-styles of the consumers. For example, a manufacturer of readymade garments may design his clothes differently matching different life styles of college-students (more fashionable), office-goers (more sober) and so on.

—       Personality: Personality characteristics such as leadership, independence, masculine, impulsive, ambitious,-etc., do influence buying behaviour.


In this case, buyers are divided into groups on the basis of their response to the product – usage rate, user status, loyalty status, buying motives, and so On.

—       Usage Rate : One possible way to define target market is by product usage. There can be heavy users, medium users, light users, and nonusers. Targeting on this basis may be useful to the seller who want to increase consumption by present users and to convince and induce nonusers to become users.

—       User Status : Market can be segmented on the basis of user status such as: non-user, ex-user, potential user, first-time user, regular-user, & so on.

—       Readiness Stage : Market can be segmented on the basis of people’s readiness to buy the product. Some people are well informed and are interested to buy the product. Some other may be well informed but not interested to buy the product.

—       Buying Motives : Buyers buy the product with different buying motives such as economy, convenience, prestige, etc. Accordingly promotional appeals can be directed to the target audience.

Explain Bases of Market segmentation by


MT UVA- University, Vocational and Affiliated Education for BMS
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