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Do you know how some organisations promote their products to literally everyone on the planet? Well, that’s the opposite of market segmentation – and a very expensive and wasteful strategy – you don’t pay much attention to most of them, do you? Market segmentation is a strategy used in marketing to break down a larger target group into smaller segments, based on their unique characteristics and habits. This allows you to target to those segments with tailor-made approaches, messages – and usually for much cheaper than broad-based promotion. 

But the real question here is, by what criteria do we segment a market? Well, you can segment based on any characteristic that is common to a specific group among the audience. Let’s take fairness cream for an example. If you are an organization that is trying to push fairness cream into the market, you need to understand, who does your product appeal to. Well, primarily women, right? So your first segmentation is by gender – you will target women. Having identified “women” as a segment you will realise there are many categories of women in the market. Some are looking for a product that removes marks. Some want wrinkle-removing effects. Some want a glowing skin.  These special requirements may depend on a variety of factors such as age, social status and more. As a marketer, you need to understand which of these special factors will contribute to segment your market further. Being able to organise your customers into groups with similar needs and wants will help you in developing a tailored marketing mix. Here are a few sample criteria you can use to segment your market:


You can divide your market into different segments based on the geographical location of your target market. It can be based on a city, country, continent or any other geographical specificity. You may even consider variables such as region or whether your target market is in an urban or suburban, and what weather patterns are common to their geographies. If you observe their marketing you will find that most multinational companies follow this strategy. It’s a well known fact that most Sri Lankans love kottu! In order to cater to Sri Lankan taste, fast-food multinationals offer a Kottu product in the Sri Lankan market. The next time you’re ordering a rice item at an international fast food chain restaurant, know that you’re benefiting from targeting ‘geographic segmentation’.


How do people differ from one to another? Customers can be segmented using attributes such as age, income, education, race, gender, occupation etc., which can also define segments. Often, customer preferences in relation to a product will mostly be affected by demographics such as their physical attributes, economic background, education level and occupational status.

Psychographic Segmentation

Every prospective customer has a unique psychographic makeup. Let’s think simple. You do realise that every person is different, don’t you? Psychographic segmentation is differentiating the market according to lifestyle, personality traits and interests etc., which further divide the aforementioned demographic segments. Analysing this and grouping similar characteristics together is the start of psychographic segmentation. You need to conduct market research and look into personality characteristics such as behaviors and habits and then segment your target customers according how they map to the traits you are looking for. Items like luxury goods (think of the advertisements for Mercedes-Benz cars or Rolex Watches) often capitalise on different psychographic factors such as self-esteem and priorities, compared to, say, fast food or energy drinks.

Behavioral Segmentation 

Behavioral segmentation is defined as dividing the total market into smaller homogeneous groups based on their buying behavior. There are a few parameters through which we can implement Behavioural Segmentation.

  • Occasion – If the product is used for a specific occasion in a customer’s life we can use occasion segmentation. The occasion can be repetitive or can be a once in a lifetime occasion; like the traditional sweet items that dominate supermarket shelves during the Sri Lankan New Year period.
  • Usage – Customers can be segmented based on their product/service usage; the features that they use and how they use it. They can be heavy users or light users, professional or recreational users, etc., based on which, the marketing mix can be set for each group. 
  • Loyalty Status –  Loyalty status is simply the segmentation of your customers according to their level of loyalty towards your brand. If your production is stopped due to a temporary closure, some customers might want to wait for months without switching to another product, purely because of the loyalty factor. Hence, it is of paramount importance for you to identify from where does this loyalty come as well as to figure out ways to retain these loyal clients via reward schemes or any other means.
  • Buyer Journey – Every consumer passes through the stages of the buyer journey; starting from the awareness of the existence of the product or the service. Once they are aware of its benefits, it causes a consideration or an interest. This is where your promotional material is important, as this is your chance to provide your potential buyers with enough and just reasons to select your product/service. As a marketer, your main goal is to shift your clients through all the stages from product awareness to purchase.

In conclusion, we know that consumers are a VERY diverse bunch. So make sure you pay close attention to the common characteristics describing your best customers, and segment your market properly. Then address your marketing mix to each segment according to their needs. If everything works out well, you should see a visible growth in your organization. Retail giants like Consumer Packaged Goods companies have mastered this approach, which is why you see several washing powder or toothpaste brands (with different prices, packaging and ‘qualities’) produced by the same company (most of the time, sold on the same shelf!).

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