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Market Segmentation

The document discusses market segmentation and targeting. It defines market segmentation as dividing a heterogeneous market into more homogeneous sub-units. The major bases for segmentation are discussed as geographic, demographic, socio-cultural, psychographic, and behavioral factors. Advantages of segmentation include distinguishing customer groups and facilitating effective marketing strategies. Effective segmentation considers measurability, accessibility, substantiality, differentiability, and actionability.

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Leana Victoria Espanola
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22 views

Market Segmentation

The document discusses market segmentation and targeting. It defines market segmentation as dividing a heterogeneous market into more homogeneous sub-units. The major bases for segmentation are discussed as geographic, demographic, socio-cultural, psychographic, and behavioral factors. Advantages of segmentation include distinguishing customer groups and facilitating effective marketing strategies. Effective segmentation considers measurability, accessibility, substantiality, differentiability, and actionability.

Uploaded by

Leana Victoria Espanola
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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TECHNOPRENEURSHIP

MARKET SEGMENTATION

Functions of Marketing:
 Market Segmentation and Targeting
 Positioning functional strategies
 Identification of market segments
 Marketing strategies

What is Market?
A market is a place which allows the purchaser and the seller to invent and gather
information's and lets the carry out exchange of various products and services. In
other words the meaning of market refers to a place where the trading of goods
takes place.

What is Market Segmentation?


 Markets are Heterogeneous; Segmentation divides them into Homogeneous
Sub-Units.
 The market for a product is nothing but the aggregate of the consumer of that
product.
 Markets break up the heterogeneous market for product into several sub units,
or sub markets, each relatively more homogeneous within itself, compared to
market into a number of sub markets/ distinct sub units of buyer, each with
relatively more homogeneous characteristics, is known as market segmentation.

 It is the Consumer who are Segmented, Not Product, nor Price


 It would be useful to provide one important clarification right at the
beginning.
 Markets, sometime, speaks of product segments and price segments and use
these expressions as synonymous with market segments.
 This can leads to a wrong understanding of what market segments, or for
that matter, the process of market segmentation as a whole, actually
connote
 We have to be clear that in market segmentation, it is the consumers who
are segmented, not the product, nor price. Market is about people who
consume the product, not about the product that's gets consumed

Why segment the market?


 Facilitates Right Choice of Target Market
 Facilitates Effective Tapping of the Chosen Market
 Makes the Marketing Effort More Efficient and Economic
 Helps Identify Less Satisfied Segments and Concentrate on Them

BASES FOR SEGMENTATION


 A market/consumer population for a product can be segmented using several
relevant bases. The major ones include: Geographic
i. Demographics
ii. Socio-cultural
iii. Psychographic
iv. Buying Behavior
Geographical Segmentation
 Segmentation of consumer based on factors like climate zone,
continents/country, region, state, district, and urban/rural area, constitutes
geographic segmentation
 Marketer, who operate globally, often segment the market segments the market
by continents/country/region in the first instance, and then go for segmentation
on other bases.
 National markets within a country like India, often segment the market by
region, state, district and urban/rural area, in the first instance, and then go for
segmentation on other bases.

Demoraphical Segmentation
 Segmentation of consumer based on variables such as race, religion, community,
language, age, stage in family cycle, gender, marital status, family size,
occupation, economic position/income/purchasing capacity level, and social
status, of the consumer demographic segmentation
 Age: Based on age on can have the 1 12 Teen Market 3) Youth Market ) Infants 2)
Child Market 4) Middle Aged Market 13 5) Elders Market
 Genders: On the basis of gender, the consumer market may be classified into
male market female market.
 Social Class: Companion design their products and services for particular social
classes. There are three social classes: 1. Upper classes 2. Middle classes 3.
Lower class

Socia Culture Segmentation


 Culture and social class are the two main bases of segmentation here.
 Culture: Culture influence consumer behavior, deeply. A given culture brings in
its own unique pattern of social conduct. A person usually acquires his cultural
attributes right at his childhood. Culture includes religious, caste, traditional,
language, pattern of social behavior.
 Social Factor: Social group of varying types exert influenced on the consumer.
Social group include family, peer group, close colleges. They adopt their
common life style.
Example:
 Zee Televisions deals with variety of channels regional channel, sports channel,
movie channel. Zee Televisions deals with variety of channels regional channel,
sports channel, movie channel.
 McDonald has both veg and non veg burger. McDonald has veg burger for
vegetarian and nonveg burger for non vegetarian. McDonald has both veg and
non veg burger. McDonald has veg burger for vegetarian and nonveg burger for
non vegetarian.

Psychographic Segmentation
 Psychographic Segmentation groups customers according to their life-style and
buying psychology.
 Many businesses offer products based on the attitudes, beliefs and emotions of
their target market.
 The desire for status, enhanced appearance and more money are examples of
psychographic variables.
 They are the factors that influence your customers' purchasing decision.
 In psychographic segmentation, elements like life style, attitude, self-concept
and value system, form the base.
 A person's pattern of interests, opinions, and activities combine to represent his
or her lifestyle
 Knowledge of lifestyle can provide a very rich and meaningful picture of a
person.
 It can indicate whether the person is interested in outdoor sports, shopping,
culture, or reading.
 It can include information concerning attitudes and personality traits.
 Lifestyle also can be used to define a segment empirically; this is often called
psychographic (as opposed to demographic) segmentation..

Behavioural Segmentation
 The customer can also be divided into certain segments on the basis of their
knowledge, attitude, use, or response to a product. Such behavioural variables
are discussed below
 Occasions: (Marraiges, festival occasasions)
 Benefits sought: (Colgate- White teeth stops bad breath, Cibaca Provides
Therapeutic benefits, Vicco vajradanthi and neem gives ayurvedic benefit)
 User Status: (Ex-users, first users, regular users, Potential users)
 Usage rate: (Light, Medium, and heavyu user segments)
 Loyality status: (Hard core loyals, Split Loyals(Two r Three brans), Shifting Loyals
(Shift from one brand to another), Switchers (No loyalty to any brand))
 Attitude: Customers are divided into five groups (Enthusiastic, Positive,
Indifferent, Negtive and Hostile)
Advantages of Segmentation
 Various advantages of market segmentation are:
i. Helps distinguish one customer group from another within a given market
ii. Facilitates proper choice of target market.
iii. Facilitates effective tapping of the market. Helps divide the markets and
conquer them.
iv. Helps crystallize the needs of the target buyers Makes the marketing effort
more efficient and economic.
v. Helps spot the less satisfied segments and succeed by satisfying such segments.
Makes the marketing effort more efficient and economic.
vi. Helps spot the less satisfied segments and succeed by satisfying such segments.
vii. Brings benefits not only to the marketer but also to the customer as well.

Effective Market Segmentation


viii. Measurability (Interms of size and purhcasing power)
ix. Accessibility (Reached and served through suitable means of distribution of
promotion)
x. Substantiality(Large and profitable)
xi. Differentiability (Clearly distinguishable)
xii. Actionalbility. (to be effective makers of segmentation should be compatible
with the manpower, financial and managerial resources)

Market Targeting
 Market targeting refers to picking a specific group or small set of groups to
which a business will advertise.
 It is based on the idea that, because it's not really possible to make or do
something that will please everyone, a business has to specialize.
 Companies select an advertising group to strengthen their brands, as well as to
get an idea of potential sales for production or financing purposes.
 They can use three main approaches for this: universal, selective or
concentrated.
 It is common for an organization to reevaluate its target groups and related
campaigns over time because markets are always somewhat flexible
 Single segment concentration
 Selective specialization
 Product specialization
 Market specialization
 Full market coverage (Coke, IBM)
 Single segment concentration:
The company selects a single segment
Ex: Nirma selected only price sensitive segment For its washing powder
 Marketing Strategies An organization's strategy that combines all of its
marketing goals into one comprehensive plan.
 A good marketing strategy should be drawn from market research and focus on
the right product mix in order to achieve the maximum profit potential and
sustain the business.
 The marketing strategy is the foundation of a marketing plan.

Target Marketing Strategies


i. Undifferentiated Marketing
ii. Differentiated Marketing
iii. Concentrated/Focused Marketing
iv. Customized Marketing (Levis, Mattel, De beers)

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