Occupation and income segmentation

Occupation segmentation groups customers by their job or profession. People doing similar work often share needs because they use similar tools, face similar problems and work similar hours. A supplier of van phone holders and dashboard cameras could aim at couriers, plumbers and mobile hairdressers. A firm selling simple bookkeeping software could aim at sole traders such as electricians and dog groomers, who must record income and expenses but have no accounts department. Grouping by occupation lets a business use words its customers recognise and advertise where they spend time.

Income segmentation

Income segmentation groups customers by how much money they have coming in. Income affects what people can afford and whether they look for luxury products or budget ones. A customer on a higher income may choose a premium version with extra features, while a customer on a lower income may want value for money, easy payment options or a basic version that does the job. A gym, for instance, might sell a cheap off-peak membership to one group and a premium membership with classes and a personal plan to another. Offering budget and premium ranges lets a business serve both without aiming everything at one income level.

Two separate bases

Occupation describes the kind of work a customer does; income describes how much they earn. They are separate segmentation bases, even though the two often overlap. A solicitor usually earns more than a shop assistant, but a shop manager can earn more than a newly qualified teaching assistant, so knowing a customer's job does not tell you their income. Assuming everyone in a job earns the same can lead a business to price a product wrongly.