Segmentation Variables for Consumer Markets

The market of consumer goods is called consumer market. In other word, the total demand of final consumers is consumer market. The goods, which are used by family, family members of persons, are consumer goods. Foodstuff, clothes, radio, television, etc. are consumer goods. The market of these very things is called consumer market. Religion, education, age, purchasing power, gender, race and caste,
occupation, urbanization, purchasing purpose, etc. directly affect consumer market. So, a business organization should study and analyze such aspects of customers for business success. Consumer market can be segmented on the basis of the four major variables. They are geographic variables, demographic variables, psychographic variables and behavioral variables.
Variables of Consumer Market Segmentation

1. Geographic variables

Consumer market can be segmented on the basis of different geographic variables. Region, density, climate, city size, etc. are the geographical variables of market segmentation.
  1. Region: Consumer market can be classified on the basis of geographic region. If the market is worldwide, it can be segmented as Pacific, Mountain, West, East, Central, South Asian, South Atlantic, Middle Atlantic etc. Suppose, consumer market is all over Nepal, it can be segmented as Himalayan Region, Hilly Region and Terai Region etc. Similarly, it can be segmented on the basis of Development region as Far Western, Mid-Western, Western, Central and Eastern regions. If the consumer market is to be segmented into further smaller segments, it can be divided on the basis of fourteen zones and seventy-five districts.
  2. Density: Here density means population density. Population density means certain number of people living in certain land area. Population density is determined by calculating the number of people living in one square kilometer land are. Population density becomes high in cities but low in villages. Market can be divided into three segments as fully urban area, suburban area and rural area.
  3. Climate: Consumer market can be segmented on the basis of climate. While segmenting market on the basis of climate, the world consumer market can be segmented as Southern and Northern regions. On the basis of climate, Nepal’s consumer market can be segmented in three parts as Himalayan, Hilly and Terai regions.
  4. City size: The consumer market can be segmented on the basis of the size of city. Some cities are very big and some are small. For example: the city having less than one hundred thousand population, city having one hundred thousand to two hundred thousand population, the city having two hundred thousand to four hundred thousand population, city having more than four hundred thousand population etc. So, consumer market in cities can be segmented on the basis of the size of population.
Tips
Geographic segmentation for consumer market
VariablesTypical Market Segments
- Region
- Density
- Climate
- City Size





Himali, Pahadi, Terai
Urban, Suburban, Rural
Northern, Southern
Under 100,000
100,000 - 200,000
200,000 - 300,000
300,000 - 400,000
Over 400,000

2) Demographic variables

Religion, education, income, age, gender, occupation, social class, family size, family life cycle, caste background, etc. are the demographic variables for market segmentation. As these variables can be easily measured, demographic variables are found to be popular in market segmentation.

  1. Religion: As religion, living style, fashion, food, purchasing behavior, become different, the total consumer market can be segmented accordingly. In Nepal, there are Hindu, Buddha, Muslim, and other religious people. According to 1991 census, they are 86%, 8%, 4% and 2% respectively. On the basis of religion, the worldwide consumer market can be divided as Catholic, Protestant, Jewish etc.
  2. Education: Education affects customers’ purchasing behavior, necessity, priority etc. On the basis of education, market can be segmented as grade school or less, some high school, high school graduates, some college, college graduates etc. On the basis market can also be segmented into two classes as educated and uneducated. About only half of the Nepal’s population is literate.
  3. Income: Customers’ income affects their purchasing power. More income creates more purchasing power and less income less purchasing power. On the basis of income, consumers’ market can be segmented into high income, middle income and low income.
  4. Age: Market can also be segmented on the basis of age. Customers are of different age groups. Their interest becomes different according to age. Small children like dolls, teenagers like goods of modern fashion. Adults and old like long lasting and gentle looking goods. On the basis of age, consumers’ market can be segmented as children’s market, teenagers’ market, adult and elders’ market etc.
  5. Gender: On the basis of gender, the total consumer market can be segmented into two as male and female. Clothes/garments, ornaments, cosmetics, shoes, papers, etc. are found segmented on the basis of gender.
  6. Occupation: People’s needs, wants, spending habit etc. become different according to their occupation. So, consumer market can be segmented into professional and technical managers, officials, proprietors, clerical, farmers, foremen, craftsmen etc.
  7. Social class: Different class people live in society. Their purchasing power, purchasing behavior, purchasing purposes, etc. are different. So, consumer market can be segmented on the basis of social classes. On this basis, market can be divided as high class, middle class and low class.
  8. Family size: family size also can be used for market segmentation. Family size affects types, volume of foodstuff and domestic goods and their use. So, market can be segmented on the basis of family size. In Nepal, most of the families are found living in joint family. We can find six members in a family on average.
  9. Family life cycle: Life cycle of family goes through different conditions. As family li8fe cycle directly affects market, it is also used for market segmentation. Number of family member becomes different according to the change of time. A young man marries and gradually gets children. The children become young and they marry and get children. As a result, the family gets on bigger and bigger. Then they leave their home for job, study etc. So, consumer market can be segmented on the basis of young, single, married couple with no children, married couple with child or children, married couple with no children living with them, elder single etc.
  10. Ethnic background: Living style, fashion, food, custom, spending habit etc. become different according to ethnic background. Their needs and wants also become different. So, ethnic background can be used for market segmentation. On this basis, market can be segmented as African, “American, Asian, European etc.

3. Psychographic variables

Lifestyle, personality and purchasing purpose are included in psychographic variables.

  1. Life style: Activities, interest, thoughts, habit etc. as a whole is called life style of the people. The way the consumers pass their time is activity. The areas of hobbies are their interest. Besides what and how they think about themselves, society and social issues are their thoughts. Lifestyles of people are different. Some are achievers and some others believers. Similarly, some are strivers. So, consumer market should be segmented on the basis of lifestyle of the people for marketing mix according to their lifestyle. Research should be carried out to study consumers’ life style. Profile should be prepared according to their lifestyle and consumers’ market should be segmented on the basis of the profile.
  2. Personality: The quality, ability and character of a person as a whole is called personality. For vehicles, cosmetics, television, garments, cigarette, alcohol etc. can be segmented on the basis of consumers’ personality. Producers produce such goods according to the personality of the consumers. Different consumers of different personality such as independent, dependent, self-dependent, ambitious, authoritarian etc. can be found in societies. So, market should be segmented accordingly.
  3. Buying motives: Consumers buy goods to fulfil their certain motive. Some consumers buy goods with ration motive, some buy with emotional motive, some others buy with ego-related motive. The consumers who buy goods with rational motive consider about components life price, quality, simplicity etc. of the goods. Those who buy goods with emotional motive consider about the variables like love, interest, hobby, imitation, gratitude etc. Those who buy goods with ego-related motive consider the variables like dignity, respect, high class life etc. So, a marketing expert should divide consumers’ market in different segments having the components analyzed influencing buying motive.

4. Behavioral variables

Benefit, purchasing occasion, users’ status, usage rate, loyalty status, attitude towards product etc. are behavioral variable. Such variables can also be used in segmenting consumer market.

  1. Benefits: Consumers expect different kinds of benefits from goods. Such benefits can be taken from quality, service, economy etc. So, consumer market can be segmented on the basis of these variables.
  2. Purchase occasion: Purchase occasion also affects purchasing and use of goods. So, these variables should also be used in market segmentation. For example, regular purchase occasion market segment, special purchase occasion market segment etc.
  3. Users’ status: Consumer market can be segmented in non-users, ex-users, potential users, first time users, regular users etc. Non-users’ group includes those who have not used the products. Ex-users’ group includes those who have already used the products but used yet but can use the product in future. The first time users group includes those who have not used the product before but are using for the first time, and the regular users’ group includes those who used the product regularly.
  4. Usage rate: Usage rate of product differs according to the using habit of consumers. Consumer market can be segmented in three groups like light users, medium users, heavy users. The purchasing percent of heavy users becomes high. So, business firms are attracted towards heavy users and inspire light users to increase usage rate.
  5. Loyalty status: Market can be segmented on the basis of the consumers’ loyalty to the brand of the products. The consumers become loyal to the brand, store and company. Market can be segmented on the basis of the extent how much they are loyal to the brand of the products. If they are fully loyal to the brand, they always buy the products of the same brand which they like much. But, if they are not so loyal to the brand of the product, they buy other products with different brand. Similarly, if the consumers are not loyal to the products, they may buy andy other products with any brand. They become uninterested to buy and brand of the goods.
  6. Attitude towards product: Customers’ attitude towards the products also can be used in market segmentation. The attitude of the customer towards the products may be enthusiastic, positive, indifferent, negative, and hostile.

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