It is widely thought in marketing that than segmentation is an art, not a science. The key task is to find the variable, or variables that split the market into actionable segments.There are 2 criteria’s for segmentation:
(1) Needs
(2) Profilers
The basic criteria for market segmentation are customer needs and demands. To find the needs and demands of customers in a market, it is necessary to undertake market research. Profilers are the descriptive, measurable customer characteristics (such as location, age, nationality, gender, income) that can be used to inform a segmentation exercise.
Demand patterns indicate the uniformity or diversity of consumer needs and desires for particular categories of goods and services. A firm would face one of three demand patterns, as mentioned below:
1. Homogeneous demand is when consumers have relatively uniform needs and desires for a good or service category.
2. With clustered demand, consumer needs and desires for a good or service category can be classified into two or more clusters, each with different purchase criteria.
3. With diffused demand, consumer needs and desires are so diverse that clear clusters cannot be identified. A firm’s marketing tasks are more difficult because product differentiation is more costly and harder to communicate.
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About Hitesh Bhasin
