Segmentation may be based on geographic, demographic, socio-economic or psychographic factors. Segmentation may also be based on benefits, usage or loyalty. Geographic segmentation is the division of markets into local, metropolitan, state, regional, national and international levels. Demographic and socio-economic segmentation include such considerations as sex, age, family size, social class, education, religion, nationality, occupation and income. Psychographic segmentation is based on behavioral variables, anxious skeptic, indifference, positive, e.t.c. Segmentation may also be based on benefits consumers sick from a particular product such as economy, durability, prestige, et c. Usage segmentation is based on volume or frequency of purchase.
Segmentation by loyalty is based on hard core loyals, softcore loyals and switchers. They may not even be frequent buyers as frequency and volume of purchase is a function of income. Loyalty describes the extent to which a buyer will not want an alternative. Switches change brand very easily.
To decide on the segment or set of segments on which a company should concentrate its marketing program setting requirements should be taken into consideration. These considerations include measurability, accessibility, sustainability and congruity.
Measurability refers to the extent to which the identified group can be measured.
Accessibility is the question as to whether the identified group can be reached with the necessary distribution and media mix. A very significant segment might lie somewhere but if the physical distribution facilities its demands is not available, that segments may be ignored.
Substantiality is another way of asking if the identified group is worth the trouble to be treated as a segment. Potential sales and cost has to be determined against potential profit as a guide as whether or not to design a unique marketing mix for an identified segment.
Congruity as the last of the consideration should be the first check for the sustainability of a segment. It refers to the degree to which members of a segment are similar that is the extent to which the members fit together as a market segments to be faced with a different marketing mix. The extent to which a segment is selected and concentrated on depends on the company's capabilities in terms of strengths and weaknesses.
