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Introduction to Customer Segmentation

Demand of a certain product or service is the driver to the creation and expansion of every business. To create the demand we need to find out new market niches that are not satisfied by the current establishment of companies. If we want this to happen we need to understand the source of the demand in our case which is the customer base. The customers are not typically one homogeneous group. They can be divided into groups or segments, the process is called customer segmentation. This can be done based on several different criteria: Geographic – where we live determines the taste of the products and services. This can include the latitude, longitude, climate, landscape where you live affects your lifestyle and your preferences. Demographic – this includes your age, gender, race, ethnicity, marital status, family life, religion, income Psychological – lifestyle, interests,  activities the person participates Behavior – the patterns observed by the person when making purchases. The...