Four Types Of Market Segmentation

Market segmentation is considered to be one of the major practices used in marketing that aims at identifying distinct groups of people who have similar needs, desires, behaviours, lifestyles, attitudes and other characteristics. It plays a crucial role in the strategic marketing planning process of the firm as products and services designed for specific groups of consumers can be developed more efficiently and economically, and helps the company gain a competitive advantage over rivals. It is easier for the company to concentrate its efforts on satisfying one smaller group of people with similar needs instead of trying to satisfy everybody and subsequently ending up with zero effect on satisfaction. By segmenting the market, the marketer can

However, there are differences in the number and types of criteria for effective segmentation proposed by other authors. Lamb, Hair and McDaniel (2011) argue that successful segmentation is associated with four key criteria that segments must fulfil. In order to exploit segmentation effectively a segment must be substantial, measurable or identifiable, accessible, and it must be responsive (Lamb, Hair and McDaniel, 2011). Apart from basic criteria of measurability, accessibility and substance, Blythe (2005) emphasises that a segment must also be congruent and stable. A condition of stability, in other words, that consumer behaviour must be predictable over time was already proposed by Thomas in 1980 (Thomas, 1980). Baker (1996) states that a concept of successful segmentation strategy includes one more requirement, a uniqueness of segments (Baker,

countries, regions of a country, towns). Different regions have different customs. People living in a particular area can have different needs than people living in other areas. Climate is another unit used for geographic segmentation because it has a significant impact on residents’ needs and buying behaviour (Lamb, Hair, McDaniel, 2011). In general, geographic segmentation is very useful for many marketers as it is relatively easy to identify different segments for their products based on the geographic location (Bartova, Barta, Koudelka, 2007; Weinstein, 2004). However, it is suggested not to only rely on geographic segmentation base but rather use multiple segmentation bases in order to be effective, as consumers in the same geographic location may show certain differences between themselves (Sun,