A market segmentation base is simply the factor that is used to define the overall market up into its individual market segments. These factors usually include some sort of description of the consumers, usually relating to their lifestyle, purchasing behavior, goals, or life-stage attributes.
Definition of a segmentation base
Segmentation bases are the dimensions that can be used to segment a market. Several definitions of segmentation bases are available, such as:
- “A segmentation basis is defined as a set of variables or characteristics used to assign potential customers to homogeneous groups." (Wedel & Kamakura, 2000)
- “Segmentation variables are customer characteristics that relate to some important difference in customer response to marketing effort." (Webster, 1984)
Both of these definitions highlight that the purpose of segmentation is to differentiate between consumers by using certain variables or descriptions. However, there is a slight variation between them; the first suggests that homogeneous groupings are sufficient, whereas the second requires the groupings responses differently to marketing offering.
Therefore, for our purposes as marketing students, a segmentation base/variable can be defined as:
- A definable characteristic, identity or behavior of an individual consumer that can be utilized to classify consumers into related groups.
What are the main ways of segmenting a market?
There are many different approaches to segmenting a market. The main segmentation bases are discussed in more detail below. However, the most common approaches include:
Description of each main consumer segmentation base
|Geographic segmentation||Segmenting by country, region, city or other geographic basis.|
|Demographic segmentation||Segmenting based on identifiable population characteristics, such as age, occupation, marital status and so on.|
|Psychographic segmentation||This segmentation approach involves an understanding of a consumer’s lifestyle, interests, and opinions.|
|Benefit segmentation||This approach segments consumers on the basis of specific benefits they are seeking from the product, such as convenience, or status, or value, and so on.|
|Behavioral segmentation||Segmenting the market based on their relationship with the product or the firm. Examples include: heavy or light users, brand loyal or brand switchers, and so on.|
Note: This topic discusses segmentation bases for consumer markets, there is a separate topic area relating to business market segmentation bases/variables.
What to review?
For a greater understanding of segmentation bases, you should also review:
- The Choice of Segmentation Bases
- Examples of Segmentation Bases
- For/Against of the different bases
- Why firms uses different approaches