Process Segmentation

Posted in Marketing and Strategy Terms, Total Reads: 851

Definition: Process Segmentation

Segmentation is the process of dividing a heterogenous market into smaller markets or sub-segments on the basis of some homogenous characteristics. Segmentation yields market segments which are similar in some aspect.

A company cannot satisfy the entire market because of limited availability of resources. Segmentation helps the company to create smaller market segments for the satisfaction of the needs of which a company can commit all its resources. A company can then focus all its efforts on satisfying the particular segment that it chooses to operate in.

Segmentation is one component of the STP (Segmentation, Targeting, Positioning) strategy of a firm-Targeting is the process of selecting some specific markets to focus on after segmentation. Positioning is the process of developing a particular image of a product in the mind of the chosen consumer segment.


Segmentation creates customer groups with three features:-

• Homogeneity (Similarity within the group)

• Distinction (Different from other groups)

• Reaction (Similar response to market changes and marketing strategies)


Segmentation may be done on the basis of the following characteristics:-

• Geographic (Local, National, International)

• Demographics (Age, Sex, Income)

• Social ( Occupation, Education)

• Psychographic (Personality, Lifestyle)

• Behavioral characteristics (Frequency of purchase, Loyalty status)


Example:- Titan has segmented its market on the basis of demographic features of age and income. It has its Fasttrack range for the youth, Sonata watches for the frugal customers and Titan Raga, Nexus and Nebula range for people with high incomes.



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