There are multiple ways to divide the market into Customer Segments. It can be identified based on the following Five Questions:
1.Who?- Customer can be segmented based on who they are i.e. their identity consumption patterns, tastes, and preferences, which may vary based on origin.
Instance: People of similar religion can show similar buying patterns and together form a market segment.
2.Where?- Customer Segments are possible based on the geographical location from where the product is to be brought, sold or consumed
Instance: Consumers in northern India buy more diamonds compared to those in southern India, who mostly buy gold.
3.What?- Segmentation can be done based on what people want or expect from business. what is it that they are trying to achieve from the product?
Instance: Some people go to the supermarket to buy groceries, while others go to supermarket for dairy products or bakery Items.
4.Why?- Customers can be segmented based on why they wish to buy a product or service. The motivation can be the pains that will be relieved or the gains that will be created.
Instance: Someone may buy a car for transportation, whereas someone else may buy it for social status. Some people buy Jewelry for consumption while other buy it as an investment.
5.How?- How the product would be used determines the segments in the market.
Instance: The needs of someone who wants a laptop for gaming would be different from someone who requires it for basic MS Office use. The needs of those who use it daily would be different from those who use the Laptop once in a while. These are all different segments.
