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Promotion Planning And Techniques
MARKET SEGMENTATION TECHNIQUES
Three basic market segmentation techniques have been identified by researchers as follows:
• Demographics
• Geo-demographics
• PsychographicsDEMOGRAPHICS involves the market segmentation base which seeks to categorize people by one of the
following means, such as age, sex, family size, stage in family life cycle, income (net worth), occupation
and similar factors. It appears to be the most widely used technique because the data related to consumers
is fairly straightforward to collect and interpret.
The family life cycle or stage in life cycle is a demographic variable which is still very useful as a base for
segmentation. It is a summary demographic variable because it combines the effects of age, marital status,
career status (income) and the presence or otherwise of children, thus making it appear more pleasant
for market segmentation since it is able to identify the various stages through which households progress.
GEO-DEMOGRAPHIC is a segmentation technique which is basically an approach that classifies
people by where they live. It is based on the belief that households, within a particular neighborhood,
exhibit similar purchasing behaviour, outlook, consumption patterns and analogous characteristics.
Thus, its belief is that two persons, who live in the same neighbourhood are more likely to have similar
characteristics than are other persons chosen at random. The second premise is that neighborhoods
can be categorized in terms of the characteristics of the population which they contain, and that two
neighborhoods can be placed in the same category. That is, they contain similar types of people, even
though they are widely separated. Geo-Demographic is thus able to target customers in particular areas
who exhibit similar behaviour patterns.
PSYCHOGRAPHICS is a method of segmentation which seeks to classify people according to their
values, opinions, personality, characteristics, interests and similar elements. Its nature makes the approach
dynamic, as its elements change, lifestyle also would be altered, the segmentation based on this technique
must be dynamic.
Weinstein, a researcher, concludes from his study that psychographics is a combination of personality
traits and lifestyles, and that the combination of these two factors provides a more meaningful and
robust segmentation base. In developing a segmentation strategy based on psychographics, marketer
usually combines it with additional dimensions such as demographics, attitudes, values, personality
traits, activities and interests, as well as usage rates.