Customer segmentation criteria can be divided into three main categories:

Profile variables: are used to characterize consumers but are not clearly linked to or predictive of an individual's behavior in a particular market.

Behavioral Variables: Relates to consumer behavior. Thus behavioral factors such as benefit usage and purchase occasions all fall under this category.

Psychographic variables: A person's attitudes, opinions, and interests are identified to create a lifestyle profile that includes consumer consumption patterns. Thus these profiles are associated with specific buying behavior.

Segmentation is a creative process and can be conducted using a range of different variables that bring a unique perspective to market dynamics. The air travel market can be segmented by air benefits (value or status), or occasion of use (business or vacation), or stage in the family life cycle (young and single or middle-aged, married with children). On occasion it may be relevant to use a single variable to segment the market. Often they will be used in combination For example - a potential market segment in the air travel market may be middle-aged consumers with children looking for status benefits for business travel. Innovative combinations of variables across a range can reveal new market segments, even in supposedly traditional markets.

These variables have no hierarchy. Marketers can use any variable starting point as first order variables and then add further variables i.e. second order variables to give a clear definition to the grouping. Thus a segment of consumers demanding physical fitness can initially be determined using benefit segmentation. Profile variables can then be added such as age, gender, geographic demographics, etc. to more clearly identify consumers to allow the company to develop specific media communication and distribution plans.


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