Strategic Marketing Basics

The markets could be segmented according to descriptive variables (objectively describing a certain number of customer characteristics). These descriptive variables allow splitting the “market” into more homogeneous sub-groups, in particular when purchasing and consuming behaviours are linked to the consumer’s personal profile (geographic origin, age, income, profession, etc.).

 

 

a) As regards consumer markets, these descriptive variables may be divided into three general categories:

 

1) Geographic variables: the geographic segmentation consists in splitting the market into several territorial units (countries, regions, municipalities, etc.).

 

2) Socio-economic and demographic variables: the demographic segmentation applies when the behaviours can be explained by the consumer’s gender, age group, family status, household size, religion, ethnicity, etc. Socio-economic segmentation is used when the consumer behaviour differs the most as a function of income, education, social class.

3) Psychographic variables: the psychographic segmentation consists in splitting the market according to the consumer personality (domineering, submissive, introverted, extroverted, conformist, non-conformist, etc.) or according to lifestyle (refocused, unconventional, superwoman, materialist, chic but conservative, etc.)

 

 

b) As regards industrial markets (or B2B), there are generally three sets of descriptive variables:

 

1) Geographic segmentation (see above)

 

2)Sector-based segmentation is used when the purchasing behaviours of organizations are differentiated according to a given sector (chemical, oil, metallurgic, iron and steel, banking, etc.)

 

3) Size segmentation is relevant if the size of the company (measured in terms of turnover, number of employees, etc.) affects the purchasing behaviours (loyalty to supplier, selection criteria of the suppliers, negotiating power, extent of requirement, etc.)