Market Segmentation Essay

Custom Student Mr. Teacher ENG 1001-04 27 November 2016

Market Segmentation

An organization cannot satisfy all the needs and wants of all the consumers. Therefore, Market is divided into different segments so an organization can focus on the needs and wants of the specific consumers who share similar needs and demonstrate similar buyer behavior. In the world, there are different types of buyers with their own needs and behavior. Segmentation is the process to match groups of the purchasers with same needs and wants.

Market segmentation:

The division of a market into different groups or the process of splitting customers in a market into different groups or segments, within which customers show similar buying behavior and share a similar level of interest in the same set of needs and wants satisfied by a marketer is called Market segmentation.

Reasons for segmentation of market:

The reason for segmenting a market is to allow your marketing program to focus only on the segment that is most likely to buy your offering. Market segmentation makes possible how to use marketing mix for different target markets. A company is then able to determine which groups of customers are best suited to serve and which product and service offers will meet the needs of the customers and will satisfy them. Therefore, the main objective of segmentation must be how to win and retain the customers you want to serve. If the segmentation process is done properly then it will insure the maximum return for your marketing and sales expenditures, depending on what you are selling and whether you are selling your offerings to individual consumers or a business.

Levels of Market Segmentation
•Segment Marketing
•Individual Marketing
•Niche Marketing
•Local Marketing
Segment Marketing:

Dividing the market into different segments on the basis of homogenous need. Segmented on basis of broad similarity with regard to some attributes. Segmentation is also sometimes identifying, capturing & retaining potential new markets.

Individual Marketing:

Extreme marketing in which marketers focus on individual customers. Keep track of individual tastes & preferences of individual customers. Many companies are approaching individuals through e-mails to promote their products.

Niche Marketing:

Marketer’s effort to position their product or service in smaller markets that have similar attributes and have been neglected by other marketer. Segment further divided into sub segments to cater unsatisfied needs of small group is called as niche.

Local Marketing:

Marketers offer customized products to suit the local markets. McDonalds introduced “Muslimized” or “Arabic” products such as Big Mac, Halal Chicken, Mac Arabia, and more…

Variables to Segment the Market:
There are a number of segmentation variables that allow an organization to divide their market into homogenous groups. These variables will be discussed briefly below:

Geographic segmentation

It is based on regional variables such as region, climate, population density, and population growth rate. Geographic segmentation divides markets into different geographical areas. Marketers use geographic segmentation because consumers in different parts of world vary in characteristics and behaviors. An area can be divided by the town, the region or the country. If you are an organization working on a global scale you may divide by global regions such as Europe, North America, South America, Asia and Africa.


McDonalds globally, sell burgers aimed at local markets, for example, They also offer vegetable burgers in India due to lots of vegetarians and burgers are made from lamb in India rather than beef because of religious issues also.

In Mexico more chili sauce is added and so on.
In Muslim countries halal food is offered.
In Arabic countries Arabic food is offered like Mc Arabia.

Demographic Segmentation

It is based on variables such as age, gender, ethnicity, education, occupation, income, and family status. Demographics originate from the word ‘demography’ which means a ‘study of population’. The population can be divided into age, gender, income, and family lifecycle amongst other variables. As people age their needs and wants change, some organizations develop specific products aimed at particular age groups. Gender segmentation is commonly used within the cosmetics, clothing and magazine industry. Income segmentation is another strategy used by many organizations Products and services are also aimed at different lifecycle segments.


For different age groups: Nappies for babies, toys for children, clothes for teenagers and so on. Introduction of Maxim, ( male lifestyle magazine covering male fashion, films, cars, sports and technology.

Psychographic Segmentation:

oIt is based on variables such as values, attitudes, opinions, interests, personality and lifestyle.
oIt is used highly in the hospitality industry
oVALS (Values And Lifestyles)
Principle Oriented- principles or beliefs rather than feelings, events, or desire for approval. Status Oriented- status or other people’s actions, approval, or opinions. Action Oriented- action prompted by a desire for social or physical activity, variety, and risk taking.

Behavioral Segmentation:

It is based on variables such as usage rate and patterns, price sensitivity, brand loyalty, and benefits sought. It refers to why people purchase a product or service. How will the product enhance their overall lifestyle? Occasion is another variable. When should a product be purchased? Occasion segmentation aims to increase the ‘reason to buy factor’ and thus increase sales. Usage rate divides customers into light, medium and heavy users. Heavy users obviously contribute more to turnover then light or medium users, the objective of an organization should be to attract heavy users who will make a greater contribution to company sales. It is based on benefits people seek when buying a product. It is based on Total satisfaction from a service rather than individual benefits.


When someone is going out to dinner McDonalds and local restaurant will not come in the same breathe for choices of where to go. When purchasing a computer the benefit sought will be of ‘ease of use’. The demand for turkeys increases during Christmas, flowers and chocolates on mother’s day and so on.

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  • University/College: University of Arkansas System

  • Type of paper: Thesis/Dissertation Chapter

  • Date: 27 November 2016

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