Bases of Segmentation

There are many different ways by which a company can segment its market, and the chosen process varies from one product to another (see). Also, since markets are very dynamic, and products change over time, the bases for segmentation must likewise change. (See Figure 2.2).

Bases for Segmentation
Primary dimension Consumer market Industrial market
Characteristics of person or organization Geography, age, sex, race, income, life cycle, personality, lifestyle Industry (SIC), location, size, technology, profitability, legal, buying situation
Purchase situation Purpose, benefits, purchase approach, choice criteria, brand loyalty, importance Volume, frequency, application, choice criteria, purchasing procedure, importance

FIGURE 2.2 Bases for Segmenting Markets: Consumer and Industrial Markets

In line with these basic differences we will first discuss the bases for segmenting ultimate consumers followed by a discussion of the factors used to segment industrial users.