See Part 2

So what are the bases for segmentation? While it is difficult to determine what will segment a market into different segments based on different benefit tradeoffs, there are some useful ways of thinking about how this might be done. In any event, however, this is typically a reiterative process (i.e., trying one way, then another).

One way to start the process is to look at the various benefits and think about whether there are groups of customers who would care about different clusters of these benefits.

In my experience, this may lead you to following bases for beginning to think about segmenting a market.

Usage - often how customers use a product can result in their making tradeoffs across different benefits. For example, light users and heavy users of a product often care about different benefits.

Application - customers who apply a product in a mission critical way often care about different benefits (for business buyers this could be a way central to their business, but a cook may use a product that is central to a recipe as well).

Prior experience with the product category - often denoted as experts and novices, these different types of prior experience usually highly correlate with different needs.

Often in consumer markets, prior brand loyalty, buying situation (work vs. entertainment), or sometimes lifestyle (as in the case of may cars) can be the basis of a segmentation.

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image of Allen Weiss

Allen Weiss is the CEO and founder of MarketingProfs. He's also a longtime marketing professor and mentor at the University of Southern California, where he leads Mindful USC, its mindfulness center.