Stage 3 Segmentation Variables

Marketers choosing to segment at the Stage 3 level face an enormous challenge in gathering useful segmentation information but, for those who do commit to segmenting at this level, the rewards may include gaining competitive advantage over rivals whose segmentation efforts have not dug this deep. However to reach the reward the marketer must invest significant time and money to amass the detailed market intelligence needed to achieve Stage 3 segmentation. Additionally much of what is needed at Stage 3 is information that is often well protected and not easily shared by customers. In fact, many customers are unwilling to share certain personal information (e.g., psychological) with marketers with whom they are not familiar.

Consequently, segmenting on Stage 3 variables is often not an option for marketers new to a market unless they purchase this access via other means (e.g., hire a consultant who knows the market to undertake customer research). To get access to this information, marketers who already serve the market with other products may be able to use primary research such as focus groups, in-depth interviews, observation research and other high level market research techniques.


Segmentation Variables
Consumer Markets
Segmentation Variables
Business Markets
Benefits Sought
price, overall value, specific feature, ease-of-use, service, etc.
Product Usage
how used, situation when used, etc.
Purchase Conditions
time of day/month/year when purchased, credit terms, trade-in option, etc.
Characteristics of Individual Buyer
purchase experience, how purchase is made, influencers on purchase decision, importance of purchase
personality, attitudes, and lifestyle combined with demographics
Benefits Sought
price, overall value, specific feature, services, profit margins, promotional assistance; etc.
Product Usage
how used (e.g., raw material, component product, major selling item at retail level), situation when used, etc.
Purchase Conditions
length of sales cycle, set product specifications, bid pricing, credit terms, trade-in option, product handling, etc.
Characteristics of Buying Center
purchase experience, number of members, make-up of key influencers, willingness to assume risk;
Stage 2 Segmentation Variables
Step 2: Choosing Market Segments