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  • Badri S Narayan


To get a product or service to the right person or company, a marketer would firstly segment the market, then target a single segment or series of segments, and finally position within the segment(s).

Segmentation is essentially the identification of subsets of buyers within a market who share similar needs and who demonstrate similar buyer behavior. The world is made up from billions of buyers with their own sets of needs and behavior. Segmentation aims to match groups of purchasers with the same set of needs and buyer behavior. Such a group is known as a 'segment'.

Segmentation is a form of critical evaluation rather than a prescribed process or system, and hence no two markets are defined and segmented in the same way. However there are a number of underpinning criteria that assist us with segmentation:

  • Is the segment viable? Can we make a profit from it?

  • Is the segment accessible? How easy is it for us to get into the segment?

  • Is the segment measurable? Can we obtain realistic data to consider its potential?

The more general bases of Segmentation include:

  • by geography - such as where in the world was the product bought.

  • by psychographics - such as lifestyle or beliefs.

  • by socio-cultural factors - such as class.

  • by demography - such as age, sex, and so on.

A company will evaluate each segment based upon potential business success. Opportunities will depend upon factors such as: the potential growth of the segment the state of competitive rivalry within the segment how much profit the segment will deliver how big the segment is how the segment fits with the current direction of the company and its vision.

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