Principles of Marketing
Chapter 7: Customer-driven marketing strategy: creating value for target
customers Market Segmentation
Market segmentation: dividing a market into
smaller segments with distinct needs,
characteristics or behavior that might require
separate marketing strategies or mixes.
Which customers will we serve?
How do we serve them?
Types of market segmentation
1. Segmenting consumer markets
2. Segmenting business markets
3. Segmenting international markets
4. Requirements for effective
Segmenting consumer markets
Geographical: divides the market into different
geographical units such as nations, regions, states,
countries or cities. (a region, a nation, province or state,
target groups…) e.g. MCDONALDS
Demographic: divides the market into groups based on
variables such as age, gender, family size, family life
cycle, income, occupation, education, religion, race,
generation and nationality. e.g. NIKE
Psychographic: divides buyers into different groups based on social class, lifestyle or personality
traits e.g. PORSCHE
Cultural: the people, their habits e.g. FOOD
Behavioral: divides a population based on their behavior, the way the population respond to,
use or know of a product. e.g. VALENTINES DAY
buying your product.
Buying on occasion: when different people buy different things on different occasions.
Benefits sought: products are targeted towards the benefits sought by the customer.
Loyalty: The more loyal your customer is, the more your customer base will increase.
Usage rate: In residential or commercial segment, the usage can be demonstrated in the
form of heavy usage, moderate usage or lesser usage.
Seeing what the consumers what and try to use the information to “manipulate” them into
Chapter 7: Customer-driven marketing strategy: creating value for target customers