Question

what are the most important customer segments ? where is the biggest growth potential ? which segmentas are declining ? which peripheral segments deserve attention ?

Answer 1

ANSWER:

The practice of dividing or segregating customers into smaller groups of individuals that are similar in ways like age, gender, interest and habits etc.

Following are few basic customer segments

1. Geographic: a large area is divided into smaller regions to divide the customers geographically eg. Rural and urban.

2. Behavioural: dividing the customers by the type of user they are. It has attributes like transactional behaviour.

3. Demographic: a customer data base is divided into characteristics like age, gender, education and income etc.

4. Lifestyle: division of customers by their habits, hobbies, fashion etc

5. Psychographic: customers are divided by the perception, social status, values etc.

Demographic segment has the biggest growth segment. This is the only segment to have many attributes to be divided into namely gender, marital status, income, education, business, occupation etc. This segment works best when the good has an individual with clearly definable traits. It is the only segment to be used when multiple segments are targeted at once. Under this segment brand loyalty could be achieved because when a marketer divides the customer on this base, it takes care of the taste and preference of the customer also. All the countries are working rigorously in getting the data of the people and making it useable for the general public. This data could be easily accessed by the marketers in their own interest.

Psychographic segment is declining as the social values, perception etc of an individual are not fixed, and are influenced by many internal and external forces. This segment requires a lot of study for a firm to get proper segments done. A lot of money is spent, so it is not advisable for a smaller business to follow this segment. The data collected has to be interpreted in a meaningful way, which is not practical always for a firm. The practical implementation of this segment is difficult.

Behavioural segment requires attention as this is based on the loyalty of the customers. Under this segment a company can sell its product in a very streamline manner. This segment also requires attention as now a day’s customers are more inclined towards brands. Behaviour is the most unpredictable attribute of an individual, only this segment gives an idea of how an individual could be segmented.