The History Of Consumer Market Segmentation Marketing Essay

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Marketing environment generally refers to the area within which a business operates its daily activities, it could be external as well as internal, and there are some factors and forces which affect the organizations performance or ability to build a good relationship with target customer. The understanding of marketing environment for a manager is pretty much important because the environment offers both opportunity and threats (Cant et al., 2006). However, the environment of marketing is classified into two major ways (Groucutt et al., 2004) these are:-

Internal or Micro environment: Micro environment is the internal environment of the organization and it is considered as main environment because within micro environment business operates its basic activity such as planning, organizing, leading etc. (Smit et al., 2007). To put it simple micro environment can be defined as all of the factors which directly or indirectly affect the decision of the management (Badenhorst-Weiss et al., 2008). However, there are many forces of micro environment which influence marketing decision these are:-

External or macro environment: Macro environmental is considered as uncontrollable factors which affect the performance and strategies of the organization; also have an influence on organization's decision making process (Dictionary, 2012) . The external environment of the organization consists of six forces (Young & Pagoso, 2008) namely:







A manager of an organization should analysis market in order to be ahead of the game, because market environment offers both opportunity and threats. SWOT analysis as well as PESTEL analysis could help a manager to identify organizations current position.

SWOT: It is a strategic tools used by a strategic manager to identify firms strength, weakness, opportunity, and threats in current market situation (Griffin, 2008). Based on SWOT analysis a company can set up a marketing strategy by using its strength and avoiding its weakness to facilitate its future operation (Hm & Böhm, 2009). It is pretty much effective if it is done properly as it helps an organization to find out its internal strength and help to make them use against unknown threats. SWOT analysis is generally used to evaluate the fit between companies' internal resources, capabilities and external possibilities. It is an essential tool in evaluating the strengths of a firm, the opportunities in the market, the competitive deficiencies, as well as external threats to the future well-being of the organization. A firm's strengths and weaknesses come from its internal origin (Foss & Knudsen , 1996). On the other hand, threats and opportunities originate from the external competitive environment in which the firm is based.

PESTEL: There are some factors which have an effect on organization's daily activities directly or indirectly, such as Political, Economic, Social, and Technological, Legal, Ecological, environment of an organization. PESTLE analysis helps an organization to identify these threats, a brief idea of these term are written below:-

Political factors are generally tax policy, labor law etc.

Economic factors include inflation, exchange rate, interest rate etc.

Social factor are people growth rate, age distribution etc.

Technological factors are change in technology, R&D activity.

Environmental/ ecological refers change in weather or climate change which definitely affects industries such as tourism, insurance etc.

Legal factors are employment law, health and safety law etc. have an on the operation of company may raise its cost.







FIGURE: ELEMENTS OF PESTEL ANALYSIS (Bensoussan & Fleisher, 2009)

Marketing segmentation: Marketing segmentation refers to knowing your customer, giving them what they want (Weinstein, 2004). According to Kotler market segmentation is the subdividing of a market into homogeneous subsets of customers, the power of this concept is that individual seller may prosper through creatively serving specific market segment whose needs are imperfectly satisfied by the mass market offerings (Vieceli & Valos, 1998). Broadly market segmentation could be done in two ways consumer market segmentation and business market segmentation. Business markets are segmented on basis of business characteristics and buying process of the company whereas Consumer market segmentation depends on the consumer behavior or characteristics of the individual (Lamb et al., 2011).

Consumer market segmentation:

Demographic: -

Age, family, sex, religion, race, marital status etc.


Country, region, urban/rural etc.

Socio economic:-

Income, education, social class, occupation etc.


Lifestyle, consumer personality etc.

Purchase behavior:-

Brand loyalty

Purchase occasion:-

Novelty, frequently, event etc.

User status

Heavy or light user (Dibb & Simkin, 1996)

Marketing mix:

Product development

Characteristics of service:

Pricing strategy:

Buyer's behavior:

International market entry strategy: