To find out about its customer base a business will split up its market into different groups. The groups they can split into are:

Age

Location

Gender

Social Class - different systems are used to define social class. An example of one is:

• A : Upper class/upper-middle class
• B : Middle class
• C1 : Lower-middle class
• C2 : Skilled working class
• D : Working class
• E : Unskilled/Unemployed

Residence - The ACORN system of classification allows businesses to target people living in a particular type of accommodation.

Religion or Ethnic groups - Some businesses may produce special ranges of products that are Halal for example

Disadvantages of Market Segmentation:

• If segmentation is taken too far it might exclude some of the businesses customers
• Consumers are more likely now to move over boundaries in their purchasing pattern, which makes segmentation a bit pointless
• If a business has tailored products for each segment it will pay a lot in production and storage

Advantages of Market Segmentation:

• A business can tailor specific variations of a product to each segment, which could increase sales
• A business can identify profitable segments easier