Module 2: Segmenting Customers

Market segmentation is a marketing strategy of targeting group of customers into subsets of consumers who have common needs and wants. Depending on specific demand and attributes business may develop product differentiation strategies.

There are dozens of ways that a market might be segmented. Choosing a segment depends on the business and the products it offers. Target Market Selection is the evaluation of each market segment’s attractiveness and selection of one or more segments to enter.



A segmentation basis is a set of characteristics or variables that is used to assign potential customers to homogeneous group.

Bases of customers’ segmentation are:

  • Geographic
  • Demographic
  • Psychographic
  • Behavioral

The traditional STP model of Target Marketing is:




“By embracing the diversity of human being we will find a way to true happiness”

Malcolm Gladwell, the author of the book Blink is my favorite author. I also found very interesting his video in which he talks about segmentation and spaghetti sauce. He says that people want variety, they have different kind of taste, they either don’t know what they want, or how to explain it.

In fact, he explains the revolutionary idea of Howard with the Horizontal Segmentation which in depth understands the needs and wants of customers. Customers are not in able to always explain what they want. Therefore, horizontal segmentation of Dr. Maskowitz says that, there is no good, better or bad products, but different kind of products that suit different kinds of people.

We have to thank Howard Maskowitz for the concept of variability, because he changed the basic and essential way of thinking about how food industry can make customers happy.

He discovered that Pepsi Co was asking the wrong question because they were looking for perfect Pepsi while they should have been looking for the perfect Pepsis.

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