Conduct a multi-level segmentation exercise for an organisation you know well.

Evaluate the
potential bases of segmentation which could have been used and justify your choice of the
factors used for the final segmentation.

Introduction
Company xxx is in the sporting goods retail business where it has defined its Market as the market for
physical fitness and recreation in Maldives with a Market size of 65,000 people.
This is a brief of the segmentation conducted for the foresaid market and the evaluation of possible
approaches for segmentation in order to select the most appropriate method for company xxx.
Selection of a base for segmentation has being done, by using the business philosophy of the company
as the guiding criteria. Furthermore, the definition of a market segment is used to determine the
components that will be required to produce at the end of the process.

1. Base Selection Criteria
Company xxx is working towards a marketing orientation, hence a segmentation approach that is
customer-centric is essential.
The definition of a market segment: A market segment consists of a group of customers within a market
who share a similar level of interest in the same, or comparable set of needs. Malcolm Mcdonald (Market
Segmentation, Revised 4th Edition, 2008)
The definition used herein and the business philosophy of Company xxx, both calls for identifying needs
of the customer. Keeping customer needs as a guideline for the base of segmentation, the components
of a market segment will be used as the base selection criteria.
The components of Market segment is given by Malcolm Mcdonald (Market Segmentation, Revised 4th
Edition, 2008) as follows:
Needs
Profile attributes
Volume or value figure
These components meet both the customer centric criteria as well as the market segment definition
criteria and will be used as a basis to evaluate potential bases of segmentation.

1.1 Potential Bases for Segmentation

1.1.1 Geographic Segmentation

Segmenting by country, region, state and city with other geographic basis giving information on the
location of customers.
From the definition herein it is evident that geographic segmentation itself does not help form a
segment that meets the criteria set in for this undertaking but will be an important variable of the
profile of the segment.
1.1.2 Demographic Segmentation

Characteristics of the population that gives a picture of customer based on a range of characteristics
like age, sex, marital status, income level etc. It does help paint a vague picture of customer needs
for some consumer products. For example it will help identify specific food types for different age
groups specially baby food or food related to different religious beliefs.
Company xxxx being in the physical fitness and recreation, a demographic segmentation will not
help identify the needs of the customer, as a specific age group or other variable used in the
demographics does not help understand the type of activity undertaken or product that will be
required.
Here again, demographics will be an important profile variable that will be help design and
determine communications, advertisements and mediums.
1.1.3 Geodemographic
This is a combination of geographic and demographic classification giving insight to the location of
customers and their lifestyle.
Geodemographic segmentation is not considered for this undertaking as this type of classification
has not being done in Maldives yet and an effort by Company xxx for such a classification cannot be
justified in terms of purpose and resource.
1.1.4 Psychographic Segmentation
Psychographics gives an understanding of the customers lifestyle, beliefs, motivations and
aspirations and can help identify how customers use products.
Lifestyle and interests of a group of customers or potential customers in itself form a segment and
will be helpful to the segmentation process to identify the needs of those customers.
Furthermore the contributions of psychographics has being highlighted by Malcolm Mcdonald (Market
Segmentation, Revised 4th Edition, 2008) as by identifying internal drivers of customer behavior that
can be associated with specific segments, psychographics can help define the most appropriate
promotional stance to take
For the foresaid reasons and as this is a data readily available with the company, psychographics will
be used as the preliminary segments for the project.



1.1.5 Behavioral Segmentation

The segmentation variables that have being considered have being customer-centric in order that
the marketer develops a profile as complete as possible on each individual. Behavioral segmentation
is categorized into end use and benefits sought. (CIM)
It can be understood that the segmentation here is done based on end use of products or benefits
sought from the products and a profile of the customer is developed. This meets the criteria set
earlier for the selection of a base for segmentation which are:
Needs
Profile attributes
Volume or value figure

2. Segmentation Process
The segmentation process for this projected is adopted from Malcolm Mcdonald (Market Segmentation,
Revised 4th Edition, 2008) and is as follows:
Phase 1 : Developing Segments
1. Defining the market: (The scope of the project)
2. Market Mapping (Structure and decision makers)
3. Who specifies what (Decision Makers and transactions)
4. Why (The needs of decision makers)
5. Forming Segments (combining likeminded decision makers)
This scope of this report does not look into the phase of selecting segments and has being omitted.
3. Market Segments of Company xxxx
The data for the market segmentation project of Company xxx has being acquired from reliable sources
and internal research undertaken. The sources of data is as follows:
Psychographics: Lifestyle has being identified through an internal research carried out on a sample taken
from 2 days of the week in all the avenues where these sports are under taken.
Demographics: Maldives department of National Planning
Benefit Sought: The information herein is from interviews of key sales people and other participants of
the foresaid sports. However a qualitative research needs to be undertaken.










Followers Chasers Loosers Courters bubbler Seeker
Profile Psychographic Lifestyle Footballer Footballer Running Tennis Swimming Surfer
Basketball Running Training badminton
Volleyball TT
Yoga
Demographics Age Group 05-12 36-43 16-24 16-24 05-12 16-24
12-16 43 Above 24-36 24-36 12-16
16-24 36-43 36-43
24-36
Gender Male Male Male Male Male Male
Female Female Female Female
What What Products Footwear Footwear Footwear Racquet Goggles Apparel
Where Apparel Apparel Footwear
When Apparel
How Features In Fashion wearable Confortable Durable Durable Stylish
Technically
Advanced
Technically
Advanced
Establsihed
Brand
Establsihed
Brand
Establsihed
Brand
Establsihed
Brand
Where Outlet Specilized
Retal
Retail Specilized
Retal
Specilized
Retal
Retail Retail
Internet
When Frequency Quarterly Need Based Bi Annually Bi Annually Quarterly Monthly
Why Benefits Shought Belonginess Price Enjoyable
expereince
less frequent
replacement
less frequent
replacement
Attract
attention
Improved
perfromance
Improved
perfromance
Improved
Social status
Improved
Social status
Improved
Social status
High Lowest High High Medium High
33,591.40 7,605.60 17,112.60 2,535.20 1,901.40 633.80
Medium Low High Medium High High
Segment Name
Market Size by population
Price Paid
Growth Potential