Market Segmentation and Its Application

Market Segmentation


Market segmentation is the process of segregating a large unit of homogenous market into different small segments which possess the similar type of characteristics. Both the business oriented and the consumer oriented companies can segment the customers by using several tools and approaches.

Basic Concept of Market Segmentation

The market segment should be easily measurable and accessible by the channels of distribution and communication. The responses of the marketing mix may not be similar to the market segmentation. It must be durable and must be profitable for the long term. The basic factors of the market segmentation can be:

  • Accessibility with the help of promotional activities
  • Proper identification of the segment
  • Its suitability with the policies and the resources of the company
  • Effective size measurement of the segment

The basis of the market segmentation can be divided into the following groups:

Age Group:

The market segmentation can be done by dividing the markets into several age groups. The products used by the teenagers will definitely differ from the kids. For example, let us do sample market segmentation.

  • Age groups: 0 to 10 years: The products used in this group can be baby food, prams, baby nappies, toys etc.
  • Age group: 10 to 20 years: This group will focus on books, school bags, lunch boxes, toys, etc.
  • Age group: 20 years and above: Magazines cosmetics and anti aging products.

The marketing strategies used for each segment should also differ from the other ones.


The markets can be divided into smaller segments depending on their genders also. As the man and women section possess different tastes and preferences, they will go for different products and services. Therefore the marketing strategies can be customized differently for the men and women. The cosmetics, jeweler, apparel and the footwear industries require the proper market segmentation specially customized for the female section.


Markets can be segmented on the basis of the profession or the occupation of the target consumers. Now, a college student will not have the same tastes and preferences like the office goers. The apparels and the shoe industries should keep track on the requirements of different segments of the people.


The markets can be divided into three different categories namely; High income, mid income and the low income group. The stores that deal with the high end products can focus on the high income group customers. According to the price level, the mid income and the low income group of people can also be segmented to a different section of the industry.

Marital Status:

The market segmentation can be done by depending on the marital status also. For example the travel agencies will not plan the same packages with the married couples and the bachelor group of friends. As they have different needs and requirements, the price and the tourist spots should be selected according to their needs.

How the Market Segmentation can be applied?

The market segmentation procedure can be applied in your business. Let us go through all the steps by which the market segmentation can be done properly:

Step 1: Define the Market

At the initial stage you will have to define the purpose or the intention of the market segmentation. Therefore the markets can be sub divided into smaller sections like the product market, consumer market, sub markets etc. For example, if you want to operate the market segmentation activities with the book store chains, you should divide the sub markets into the retailers, departmental stores, standalone book stores etc.

Step 2: Create Segments

As we have defined the market clearly, the segmentation can be done in this stage. You can consider the selection of 2 or 3 variables with the purchasing behaviors of the book lovers. For example, you can create the segments with the age group where the pre teens, the teens, the adults and the old adults will have different tastes for the books. You can also segment the market with the shopping behavior of the potential customers. For example, a group may totally avoid shopping, some may occasionally do the shopping activities and some may love shopping.

Step 3: Evaluate the Proposed Market Segment

After creating the market segments, you should test the viability whether they can be applied logically or not. You should check whether the evaluation criteria match the assessment or not

  • Homogenous : The requirements of the segment should be similar
  • Heterogeneous : The segment may have variations in their needs
  • Practical : Whether the actions are practical to the target market
  • Responsive: The market segments are properly responding with the elements of the marketing mix.
  • Measurable : The research data can be measurable

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Step 4: Create Segment Profiles

For describing the different segments, you are required to define the segment profiles properly. For identifying and describing the segments more clearly, it can be divided into different key measures like:

  • Segment growth rate
  • Size measures of the segment
  • Overall market proportion

The level of the brand loyalty, usage level and the consumer needs can describe the consumer behavior in the proper ways.

Step 5: Final Evaluation of Segments

In this stage the final evaluation of the segments can be done with the financial issues including profit margins and the segment growth rate. The firm’s goals and the strategies are also decided in this stage.

Step 6: Final Selection of Target Markets

In the final stage the target markets are to be selected according to the assessment information. Different factors like the strategy of the firm, the attractiveness of the segment are to be considered while doing the selection.


From the article we can easily understand that:

  • The basic concept of market segmentation
  • The purpose of doing the market segmentation
  • How the segmentation can be done in the step by step method

Therefore, the market segmentation can be done depending on the basis of several factors like age, gender, occupation, income and the marital status.

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