How Markets Are Segmented

Types of Segmentation Bases

Table 5.1 "Common Ways of Segmenting Buyers" shows some of the different types of buyer characteristics used to segment markets. Notice that the characteristics fall into one of four segmentation categories: behavioral, demographic, geographic, or psychographic. We'll discuss each of these categories in a moment. For now, you can get a rough idea of what the categories consist of by looking at them in terms of how marketing professionals might answer the following questions:

  • Behavioral segmentation. What benefits do customers want, and how do they use our product?
  • Demographic segmentation. How do the ages, races, and ethnic backgrounds of our customers affect what they buy?
  • Geographic segmentation. Where are our customers located, and how can we reach them? What products do they buy based on their locations?
  • Psychographic segmentation. What do our customers think about and value? How do they live their lives?

Table 5.1 Common Ways of Segmenting Buyers

By Behavior

By Demographics

By Geography

By Psychographics
  • Benefits sought from the product
  • How often the product is used (usage rate)
  • Usage situation (daily use, holiday use, etc.)
  • Buyer's status and loyalty to product (nonuser, potential user, first-time users, regular user)
  • Age/generation
  • Income
  • Gender
  • Family life cycle
  • Ethnicity
  • Family size
  • Occupation
  • Education
  • Nationality
  • Religion
  • Social class
  • Region (continent, country, state, neighborhood)
  • Size of city or town
  • Population density
  • Climate
  • Activities
  • Interests
  • Opinions
  • Values
  • Attitudes
  • Lifestyles