Market Segmentation

Marketing is responsible for knowing and understanding the market, doing market segmentation and developing value proposition in order to satisfy customers’ needs in those segments (McDonald 2006). Market segmentation is the process of dividing mass market into distinct manageable segments based on common characteristics and needs and drafting similar responses to the marketing actions (Baines, Fill & Page, 2011). Segmentation is used for identifying profitable customers for decision making about where and how an organization should compete (Dibb, 2001). Market segmentation gives the opportunity to business to fulfill customers’ needs and buying requirements by enabling close matching to customers’ needs (Dibb, 2001).

In the UK, water market has several segmentation variables regarding all segmentation criteria. Segments are determined and managed based on the development in the marketing environment and its impact on consumer behavior (Dibb, 2001).

Based on the profile criteria, demographic segment has some key variables. The age is a key variable as in the UK as drinking pure water is well spread out among youth generation in the UK. It is more common among young women. Health concern is obvious among educated individuals. The geographic aspect makes big difference as in UK Natural Mineral Water accounts for 62% of the UK market, Spring Water accounts for 31%, Bottled drinking waters (ie. so-called ‘table’ waters) account for 6%, Purified water 2% of the total market (British Bottled Water Producers, 2012).

From psychological perspective, customers and especially young customers are looking to have healthy pure natural water as most of them are health conscious (BBC, ND).

As Dibb (2001) stated that Business should initiate detailed records of customer needs, preferences and behavior. Behavioural segment is related to the consumption of bottled water where in UK. Between 1993 and 2012, the UK bottled water market has grown from 580m liters to more than...