A clock and watch manufacturer realizes that she is operating in the market for machines that measure time

a. Segmenting:

In this case, the market is to produce the machines that measure time. Thus, the market segments could be classified on the machine utilization or the purpose of measuring time.

• Measuring time in a day: clock, watch
• Measuring a cumulative period of time: timer

Each segment could be divided into subsequent segments. For instance, there would be watches for men, women and kids.

b. Key variables:

To segment the market, there would be some following key variables:

• Benefit sought: Measure time in a day or measure cumulative period of time
• Demographic: Age, Occupation
• Psychographic: Lifestyle, Interest